"Fantastic" trading at the Halifax boosts Lloyds profits

The banking giant posted bottom line pre-tax profits of £5.3​bn ​in​ 2017 - its highest pre-tax profit since 2006.

Russell Galley, ​m​anaging ​d​irector​ of​ Halifax​, said:​ “We had a fantastic 2017 and made a telling contribution to another strong set of results for Lloyds Banking Group.

“We have grown our market shares across all of our core Halifax product areas, as we remain focused on helping make our customers better off.”

​He said that​ Halifax​, a​s one of the ​group’s ​main brands​, ​will play a key role in becoming simpler and more efficient.

“Meeting the changing behaviour of customers is crucial to our strategy and continuing to evolve our branch network, ensuring we have the right kinds of branches in the right locations, remains a key part of this​,” said Mr Galley.​

​“​We know customers value our guidance and face to face support in our branches, and our new formats, including the forthcoming flagship branch in London, are designed around giving our colleagues the flexibility to better meet customers’ needs.​”

​Halifax has also been developing its​ website and mobile app to help customers access ​banking​ services when and where ​it ​suits them.

​“​Based on the number of accounts that are opened online, Halifax is one of the most digitally advanced banks, and our mobile app continues to be top-rated, recognising how simple and easy it is to use​,” said Mr Galley.​

“​We’ve helped thousands of customers to own their own home in 2017 and given them an extra boost through more cashback than ever before. As a ​g​roup, we lent more than £13 billion to first-time buyers last year.​“​

​Consumers voted Halifax the top current account provider at the Moneyfacts Awards last month.

​“​Since the launch of the Current Account Switching Service, almost a million customers have made the switch to Halifax, more than any other bank​,” said Mr Galley.​

​“​Our £125 switching offer continues to provide great value for customers and we paid out £14​m in 2017.​“​

​He said that the​ monthly Halifax Savers Prize Draw, which provides savings customers with the chance to win up to £100,000, has paid out more than £48m in prize money to over 83,000 customers since it launched in 2011.

​Parent company Lloyds Banking Group​ used the results to unveil plans to invest more than £3​bn in a new three-year strategy​ to increase staff training and embrace new technology.​ ​

​This will include its biggest ever investment in ​employees​ as it looks to increase staff training and development by 50​ per cent​ to 4.4 million hours a year.

The rise in annual profits comes despite a £1.7​bn hit from the payment protection insurance (PPI) mis-selling scandal last year, after Lloyds revealed an extra £600​m put by for compensation in the fourth quarter.

The update follows the bank’s return to private ownership last summer, nearly nine years after being bailed out at the height of the financial crisis.

​​Lloyds’ chief executive Antonio Horta-Osorio said: “2017 has been a landmark year in which the group has made significant strategic progress and returned to full private ownership.

“We have delivered another year of strong financial performance with improved profit and returns on both a statutory and underlying basis and have now built the largest and top rated digital bank in the UK.”

Pay details released alongside the results also showed that Mr Horta-Osorio saw his base salary rise to £1.2​m from £1.1​m, alongside additional increases to his long-term incentive plan and benefits.

It brings his total remuneration package to £6.42​m, up from £5.79​m.

The ​group said it would increase the staff bonus pool by around 5.5​ per cent​ to £414.7​m for 2017 after the bumper profit haul.

It is sticking to its £2,000 cash bonus limit, with the remainder paid in shares and deferred stock.

Mr Horta-Osorio also praised the resilience of the UK economy and said its plans were based on interest rates rising to 1.25​ per cent​ by the end of 2020.

There is speculation the Bank of England may move to increase rates again as soon as May.

Mr Horta-Osorio said: “Although the precise nature of the UK’s future relationship with Europe remains unclear and the economic outlook is therefore uncertain, the economy has been resilient, with low unemployment, stable house prices, record employment and GDP growth of 1.8​ per cent​.”

​​Laith Khalaf, senior analyst at Hargreaves Lansdown, said​: “There’s a lot to like in Lloyds’ numbers, with profits rising, costs under control, and prodigious amounts of cash being thrown off to shareholders. ​

“With more rate rises waiting in the wings, this looks like a tailwind that’s going to be blowing behind Lloyds for the foreseeable future.”

Lloyds also unveiled a £1​bn share buy back programme alongside the results and said it would pay a 3.05p​ ​per share dividend to investors - up 20​ per cent​ on 2016.