Lloyds Bank half-year profits jump 23%

(Sharecast News) - Lloyds Bank held annual guidance after a 23% jump in half-year profits driven by higher net interest income and announced a £1bn share buyback.

Pre-tax profit rose to £4.3bn in the six months to June 30 benefiting from higher total income and controlled costs, which were partially offset by higher charges for operating lease depreciation and impairment, Lloyds said on Thursday.

The bank added that it would now will target a return on tangible equity of around 20% by 2030, with plans to expand its core retail banking business and use artificial intelligence to produce around £2bn in cost savings, although it did not say whether this would involve job losses.

Underlying net interest income rose 9% to £7.3bn, supported by a higher banking net interest margin of 3.19% as structural hedge income increased and average interest‑earning assets grew 4% to £475.7bn. Lloyds said this was partly offset by ongoing asset margin compression.

Underlying other income climbed 11% to £3.3bn, driven by stronger customer activity and continued benefits from strategic initiatives across Retail, Commercial Banking and Insurance, Pensions & Investments.

Operating lease depreciation increased 18% to £841m, reflecting a second‑quarter charge linked to falling used‑car prices, alongside fleet growth and the depreciation of higher‑value vehicles. The bank said this impact was partly mitigated by ongoing risk‑management actions.

Credit performance remained "strong and stable", with an underlying impairment charge of £617m, equivalent to an asset‑quality ratio of 25 basis points. This included an £80m net charge from updated economic scenarios, compared with a small credit a year earlier.

Reporting by Frank Prenesti for Sharecast.com