Customers are flocking to the Halifax

Lloyds Banking Group has overcome challenging trading conditions to report a doubling in profit in the first three months of 2017, boosted by a strong performance from the Halifax.
Lloyds has doubled its profitsLloyds has doubled its profits
Lloyds has doubled its profits

The '‹banking group, which includes Halifax Bank following the bail out of HBOS during the financial crisis, '‹posted first quarter pre-tax profits of £1.3'‹bn, up from £654'‹m a year earlier.Halifax'‹ managing director'‹ '‹Russell Galley said: “We have had a strong performance in the first quarter which keeps us in good shape for 2017. “For Halifax, our strong performance has also been reflected by customer behaviour. The latest data from BACS showed that Halifax is the most switched to bank on the high street. More new customers from July to September 2016 came to us than any other bank or building society. More than 53,000 new customers chose to bank with us during this time – a net gain of over 28,000 new customers.”He said the Halifax has attracted more than half a million customers who have switched over to the bank since the introduction of the Current Account Switch Service (CASS).'‹Elsewhere, the Halifax Savers Prize Draw has also attracted new customers.'‹“Our latest Thunderbirds campaign really was ‘go’ in terms of getting this year’s Halifax Savers Prize Draw off to a flying start last month, and we’ll be offering even more prizes this year'‹,” said Mr Galley.'‹'‹L'‹l'‹oyds, which is now less than 2 per cent owned by the Government, increased profits despite the bank being forced to set aside £350m to cover mis-sold payment protection insurance (PPI) claims and £100m to cover compensation for victims of fraud by former HBOS staff.On an underlying basis, the group saw a 1'‹ per cent'‹ rise in profits to £2.08'‹bn, but this defied expectations for a decline a'‹nd'‹ it said the economy '‹is still holding up well.Lloyds'‹, which is the '‹UK’s '‹biggest mortgage lender '‹thanks to the Halifax, said growth '‹is strong and is expected to continue at a similar rate to 2016, at around 2'‹ per cent.'‹Richard Hunter, head of research at Wilson King Investment Management, said the bank was in the middle of a “sweet spot” caused by the robust economy.But '‹analysts flagged concerns over the bank’s exposure to a downturn, with fears mounting that surging inflation caused by the Brexit-hit pound will bring an end to consumer spending-driven growth.The first-quarter earnings mark another step forward in the bank’s recovery story as it edges closer to being fully returned to private hands in the coming months, with the Government stake being cut to below 2'‹ per cent'‹ earlier this month.The Government announced last week that it had already recouped all of the £20.3'‹bn of taxpayer cash used to bail out Lloyds at the height of the financial crisis.Lloyds chief executive Antonio Horta-Osorio said it was a “moment of huge pride for all of us at Lloyds”.He added that the results showed the bank’s “ability to respond to a challenging operating environment”.He brushed aside fears of rising consumer debt, insisting underlying household borrowing was still less than it was before the financial crisis, with most of the recent growth coming from student loans and car finance.On the HBOS payout, Mr Horta-Osorio said the group was determined that victims of the fraud would be “fairly, swiftly and appropriately compensated”.