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CEO hails recovery of bank

Lloyds profits highest since financial crash

Antonio Horta-Osorio Youtube

Antonio Horta-Osorio

Lloyds Banking Group confirmed its continued recovery after reporting its biggest half-year profit in eight years.

The bank, now released from state shareholdings, increased its interim dividend and said underlying profit rose 8% to £5.5 billion and statutory profit by 4% to £2.5bn.

However, this was lower than the £2.86bn estimated by analysts because of a higher-than-expected payout to customers mis-sold payment protection insurance. Lloyds set aside a further £1bn for compensation despite saying nine months ago that hit hoped to have drawn a line under the scandal.

Its shares fell 2% in early trade because of the missed profit target and the higher than expected compensation payment.

The bank declared an interim dividend of 1p per share, up 18%.

António Horta-Osório, chief executive, said: “Following the successful transformation of the group to become a simple, low risk, UK focused retail and commercial bank, we have delivered another strong set of results with increased underlying and statutory profit and strong capital generation, whilst completing the acquisition of MBNA and returning to full private ownership.

“The UK economy remains resilient following strong employment and GDP growth in recent years together with private sector deleveraging and rising house prices. Inflation is however now rising above disposable income given the recent depreciation in sterling and, while this may affect consumption going forward, the economy should benefit from rising exports and earnings from foreign assets.

“We have announced that our next strategy update for the period 2018-2020 will accompany the group’s full year results in February 2018, and in preparation for this we have made a number of organisational and senior management changes.

“The changes are aimed at aligning and strengthening the group’s structure to ensure we meet evolving customer needs and deliver the continuous transformation required of the organisation in the most effective way.

“Our differentiated UK focused business model continues to deliver, with our cost leadership and lower risk positioning providing competitive advantage. Our strong financial performance and strategic progress continue to position us well for delivering our purpose of Helping Britain Prosper.”

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