LONDON: Lloyds Banking Group plc announced increased profits and a higher dividend for the first half of 2025 on Thursday, citing income growth, cost discipline, and robust asset quality.
The UK-focused bank reported a statutory profit after tax of £2.5 billion for the six months ending June 30, 2025, up 4% from £2.4 billion in the same period last year. Underlying profit reached £3.6 billion, driven by a 6% rise in net income to £8.9 billion.
Group Chief Executive Charlie Nunn credited the bank’s “purpose-driven strategy” and “sustained strength in financial performance” for the results. “This performance has enabled the Board to announce an increased interim dividend, up 15% year on year,” Nunn stated.
Key Financial Highlights:
- Net Interest Income: Underlying net interest income rose 5% year-on-year to £6.7 billion, supported by a banking net interest margin of 3.04% (up 10 basis points) and higher average interest-earning assets (£458 billion).
- Other Income: Underlying other income increased 9% to £3.0 billion, reflecting stronger customer activity and strategic initiatives.
- Costs & Impairments: Operating costs rose 4% to £4.9 billion due to inflation and strategic investment, partly offset by savings. The underlying impairment charge was £442 million, with an asset quality ratio of 19 basis points, described as robust.
- Lending & Deposits: Customer loans grew by £11.9 billion (3%) to £471.0 billion. Customer deposits increased by £11.2 billion (2%) to £493.9 billion.
- Capital & Returns: Strong capital generation of 86 basis points resulted in a pro forma CET1 ratio of 13.8%. The interim ordinary dividend rises 15% to 1.22 pence per share (£731 million total). Return on tangible equity was 14.1%.
Strategic Progress & Outlook:
Lloyds reaffirmed its full-year 2025 guidance, including underlying net interest income of approximately £13.5 billion, operating costs of around £9.7 billion, and a return on tangible equity of about 13.5%. The bank also expressed confidence in its 2026 targets, including a return on tangible equity above 15% and a cost:income ratio below 50%.
Nunn highlighted strategic progress, including generating over £1 billion in annualized additional revenues from initiatives, putting the bank on track to exceed £1.5 billion by 2026. He also emphasized Lloyds’ role in “Helping Britain Prosper,” citing support for first-time buyers, social housing, financial empowerment products, and over £9 billion in sustainable financing provided so far in 2025.