Lloyds Banking Group has reported a 23% rise in statutory half-year profit before tax to £4.3 billion as it benefited from higher total income and controlled costs.
The result was above an average analyst forecast of £4.12bn and the bank’s £3.5bn profit in the same period last year.
The board announced an increased interim ordinary dividend of 1.58p per share, up 30% from the prior year, alongside a new £1bn share buyback programme.
Underlying loans and advances to customers grew 2% to £491.5bn, while customer deposits increased by 1% to £500.9bn. The group reiterated its 2026 guidance for underlying net interest income greater than £14.9bn and a cost:income ratio below 50%.
Lloyds includes Bank of Scotland and Scottish Widows and CEO Charlie Nunn outlined its new three-year strategic plan.
“In the first half of 2026, we delivered sustained strength in financial performance, with continued income growth, improving operating leverage, strong credit performance, growing capital generation and increasing shareholder returns,” he said.
“We are successfully completing our 2022 to 2026 strategy, focusing on customer experience, pivoting the Group to growth and laying the foundations for our exciting new strategy. We have strengthened our market leadership, built our digital and AI capabilities, and enhanced our cost and capital leadership, while remaining on track to deliver our 2026 financial targets.
“This ensures the group is well placed to launch our new strategy, Accelerate 2030, from a position of strength. Building on our leadership position we will accelerate through reimagined customer experiences, increased group connectivity, and a productivity step-change, all enabled by pioneering technology.
“Our strategy will allow us to unlock the next phase of growth and sustainable value creation for our shareholders.”
Nick Sherrard, managing director of Label Sessions, said: “Lloyds has now delivered on a five-year plan that was all about fixing the machine.
“Cutting costs, accelerating digitisation, and being more efficient with capital – on its own terms that strategy has worked, translating into higher net interest income and profits. The challenge now is to move from fixing the machine to fixing the proposition.
“Lloyds has around 21.5 million customers using its apps and a product range that runs from current accounts to pensions. It has long had the raw materials to help someone manage all of their money. What it hasn’t done is assemble them into one experience.
“With the more recent acquisition of Curve, it can go further still and help customers manage money held with other providers.
“That is the bank’s new growth story, which is now far more important than its record on cost reduction. The last plan was judged on cost ratios and capital efficiency. This one should be judged on whether customers can see a difference in the products and services Lloyds provides them.”
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