UK economy boosts Lloyds' growth significantly
Lloyds Banking Group has announced its financial results for the first half of 2025, demonstrating a robust performance that has surpassed expectations, despite the ongoing uncertainty surrounding the enquiry into mis-sold car financing products.
The group reported a net income of £8.914 billion, representing a 6% increase compared to the same period in 2024. While the specific profit after tax figure was not disclosed, the statutory pre-tax profit stood at £3.5 billion, a 5% rise compared to the previous year.
Underlying loans and advances to customers increased by £11.9 billion (3%) to £471.0 billion. This growth was driven by Retail lending increasing by £10.1 billion and Commercial Banking lending rising by £1.2 billion. Additionally, customer deposits increased by 2% to £493.9 billion, with £3.7 billion growth in Retail and £7.6 billion in Commercial Banking.
Zoe Gillespie, wealth manager at RBC Brewin Dolphin, noted the strong set of results, stating, "Despite interest rates being on a downward trajectory, Lloyds managed to strengthen its net interest margin and secure more customer deposits."
In a competitive UK banking environment, Lloyds has managed to secure more customer deposits, a testament to its strategic initiatives, enhanced digital capabilities, and the improving UK economic conditions.
The group also announced a 15% increase in the interim ordinary dividend for 2025, with the dividend set at 1.22 pence per share. Group chief executive Charlie Nunn reaffirmed Lloyds' 2025 guidance.
However, the big unknown for Lloyds remains the enquiry into mis-sold car financing products, making it one of the most exposed financial institutions. In preparation for this, Lloyds has put aside £1,150m to cover remediation costs related to the motor finance enquiry.
Despite these uncertainties, Lloyds Banking Group has delivered another strong set of results, with profits and income beating expectations. The bank reported a statutory profit after tax increase of £2.5 billion, up 4% year on year. The bank's underlying profit was £3.6 billion.
Looking ahead, Lloyds expressed confidence in its 2026 target of delivering more than £1.5 billion in profits. Operating costs rose by 4% to £4.9 billion due to inflationary pressures and business growth costs.
In conclusion, Lloyds Banking Group's first-half financial performance demonstrates a resilient and adaptable business, capable of navigating both challenges and opportunities in the ever-evolving financial landscape.
- Lloyds Banking Group's financial results for the first half of 2025 showed a notable improvement in the banking and finance sector, with a 4% increase in statutory profit after tax and a 6% rise in net income compared to the same period in 2024.
- The bank's strong performance is not confined to finance alone; it also successfully secured more customer deposits in a competitive UK banking environment, a testament to its strategic initiatives and enhanced digital capabilities.
- As the Group looks forward to 2026, it remains optimistic about delivering more than £1.5 billion in profits, despite ongoing uncertainties such as the enquiry into mis-sold car financing products, which require significant remediation costs of £1,150m.
