24th Jul 2025 09:10
(Alliance News) - Lloyds Banking Group PLC on Thursday increased its dividend ahead of half-year earnings growth and confirmed its full-year guidance, citing strategic progress and strong capital generation.
The Edinburgh-based lender, however, did note the current relatively high level of interest rates in the UK is a threat to consumer spending.
Lloyds posted pretax profit of GBP3.50 billion for the six months that ended June 30, up 5.4% from GBP3.32 billion the year before. Net income rose 6.2% to GBP8.91 billion from GBP8.39 billion.
Underlying net interest income was up 5.0% to GBP6.66 billion from GBP6.34 billion, while total costs increased 2.3% to GBP4.91 billion from GBP4.80 billion. Net interest margin was 3.04%, up 10 basis points from a year before.
Lloyds took an underlying impairment charge of GBP442 million, up from GBP101 million a year before.
The bank lifted its interim dividend by 15% to 1.22 pence per share from 1.06p a year earlier.
"Our strategic progress and sustained strength in our financial performance allows us to re-affirm our 2025 guidance and gives us confidence in our 2026 commitments. It also underpins our delivery of higher, more sustainable returns for our shareholders," said Chief Executive Officer Charlie Nunn.
Lloyds said it continues to expect underlying net interest income of around GBP13.5 billion for 2025, against GBP12.8 billion in 2024, and expects operating costs of about GBP9.7 billion, compared to GBP9.4 billion in the prior year. It expects a return on tangible equity of 13.5% for the full year, down from 14.1% in the first half.
In 2026, Lloyds maintained guidance for a cost-to-income ratio of less than 50%, a return on tangible equity of more than 15%, and the company aims to pay down to a CET1 ratio of around 13.0%. Its CET1 ratio in the first half of this year was 13.8%.
With regards to its Commercial Banking arm, Lloyds said it "remains cognisant of the continued relatively elevated interest rate environment especially in, but not limited to, sectors reliant upon consumer discretionary spend."
Shares were down 0.6% to 77.14 pence. The wider FTSE 100 index was up 0.6%.
By Tom Waite, Alliance News editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
Lloyds