Lloyds sees H1 profits surge, guidance revised up

1st Aug 2013 07:16

Lloyds hailed a huge increase in underlying profits in the first half, helped by rising income and margins as well as reductions in costs and impairments.The bank reported an underlying profit of £2.90bn, up from just £1.04bn in the first six months of 2012. On a statutory basis, the bottom line swung to a profit before tax of £2.13bn, compared with a loss of £0.46bn previously.The company said that costs and impairments were down 6.0% and 43%, respectively. Meanwhile, the net interest margin (NIM) improved ahead of guidance to 2.01%.Total underlying income rose 2.0% from £9.25bn to £9.46bn.Lloyds also made upwards revisions to its full-year guidance, with NIM expected to rise to around 2.10%, ahead of the previous 1.98% target.As announced earlier in the year, total group costs should fall to around £9.6bn in 2013 and to £9.15bn in 2014, an improvement of nearly £1.0bn on previous guidance.Non-core assets are to be scaled back to less than £70bn by the year end, while the fully loaded core tier-one capital ratio should rise above 10%, with both targets being 12 months ahead of plan."Our strong momentum is reflected in the significant upgrades to our guidance which we have announced in this half-year," said Chief Executive Officer António Horta-Osório."We have made substantial progress on the delivery of our strategic plan, and have significantly improved the group's performance, balance sheet strength and resilience while continuing to deal with legacy issues. While the UK economy remains subdued and we await further clarification on the detail of regulatory implementation, including on capital and ringfencing, we expect to deliver further progress in the remainder of 2013 and beyond."BC