Lloyds Banking Group PLC said it was ‘well positioned to deliver’ on its ambitions and raised its full-year guidance off the back of higher income and profit in the last six months.

For the half year ended June 30, the Edinburgh-based bank said its pretax profit rose by 23% to £3.87 billion from £3.15 billion for the same period in 2022.

Total income rose to £14.90 billion from £11.99 billion. This included net interest income of £6.80 billion, up 13% from £6.04 billion. Other income increased to £8.10 billion, swung from a £18.03 billion loss the prior year. Operating expenses meanwhile increased 8.1% to £4.77 billion from £4.42 billion.

Pretax profit for the second quarter was £1.61 billion, up 0.3% from £1.61 billion for the same quarter last year. Net income increased 6.5% to £4.53 billion from £4.26 billion.

Lloyds declared an interim dividend of 0.92 pence per share for the half year, up 15% from 0.80p the previous year but down 43% from 1.60p for the second half of 2022.

Shares in Lloyds were down 2.6% at 44.88 pence on Wednesday morning in London.

The bank said the macro-economic climate has changed significantly in recent months with ‘higher and more persistent inflation, driving a significant increase in interest rates and a slower economic recovery than we had anticipated.’

Consequently the bank said it is focused on supporting customers through the cost of living crisis, contacting users to offer cost of living support. Customers opened 1.9 million new savings accounts in the half year, which Lloyds said was ‘in response to the group’s higher rates and enhanced offering.’

Lloyds said it was ‘enhancing’ its full year outlook ‘based on our purpose-driven strategy, robust financial performance and the group’s revised macroeconomic forecasts.’ It now expects a banking net interest margin over 310 basis points, up from 305 in May, and a return on tangible equity of over 14%, up from around 13%.

‘We know that rising interest rates, cost of living pressures and an uncertain economic outlook are proving challenging for many people and businesses...we remain fully focused on proactively supporting our customers and helping them navigate the current environment,’ said Chief Executive Charlie Nunn.

‘The group delivered a robust financial performance in the first half of 2023 with strong net income and capital generation alongside resilient asset quality,’ he added. ‘We continue to make good progress on delivering our strategic initiatives.’

Copyright 2023 Alliance News Ltd. All Rights Reserved.