Cost-cutting drive boosts Lloyds Banking profits

The high street lender said underlying profit rose 7 per cent to £4.2bn over the six months to June 30, while statutory pre-tax profits surged 23 per cent to £3.1bn.

But the banking giant said it set aside £550m to cover PPI mis-selling claims in the first half of the year, bringing its total bill for the scandal to £19.2bn.

It also was hit by £377m in restructuring costs to cover the likes of redundancy payments to workers as it pushes ahead with a three-year strategy that will see it focus on digital banking.

The bank has been undergoing an overhaul of its workforce and branch network, having most recently announced plans to cut 450 jobs mainly affecting back office staff, while creating 255 new roles.

Lloyds is currently aiming to cut its operating costs to less than £8bn in 2020.

Chief executive Antonio Horta-Osorio said: “We have delivered another strong and sustainable financial performance with increased statutory profits, higher returns, and a strong capital build.

“In February, we announced an ambitious strategy to transform the group for continued success in a digital world.

“We have made a strong start in implementing the strategic initiatives which will digitise the group, enhance customer propositions, maximise our capabilities as an integrated financial services provider and transform the way we work.

“Our differentiated UK business model continues to deliver with our multi-brand, multi-channel approach, cost leadership, low-risk positioning, investment capacity and execution capabilities positioning us well for sustainable success and continuing to deliver our purpose of Helping Britain Prosper.”