Lloyds Banking Group: Banking giant reveals higher-than-expected profit for first half of 2025
Lloyds Banking Group has unveiled a higher-than-expected profit for the first half of 2025, as it benefited from a jump in lending and savings balances.
The group, which incorporates Lloyds Bank, Halifax and Bank of Scotland, reported a pre-tax profit of £3.5 billion for the first six months of the year – 5 per cent higher than a year ago,
Earnings for the first half also came in ahead of the £3.2 billion analysts had expected.
Lloyds said total lending to customers increased by £11.9 billion over the period, or 3 per cent, driven by UK mortgages with some 33,000 first-time buyers borrowing on a home.
Customer deposits also grew by £11.2 billion, or 2 per cent, following a strong season for ISAs, while more people moved money out of current accounts and into savings.
Meanwhile, Lloyds confirmed there had been no change to its motor finance provision, having set aside £1.2 billion to cover potential costs and compensation related to commission arrangements.
The group is exposed to the motor finance market through its Black Horse business.
Charlie Nunn, the group’s chief executive, said: “We continue to make great progress in our purpose-driven strategy, building differentiated customer outcomes and delivering growth across our business as we build towards our ambitious targets for 2026.”
Richard Hunter, Head of Markets at interactive investor, commented “Lloyds has provided some relief that the UK consumer is alive and well, although the group is taking a more cautious stance at the corporate level.
"Indeed, impairments are the most notable headwind for Lloyds at the moment. While no further provisions were taken this quarter for the remediation of potential motor finance commission arrangement fines, £1.2 billion has already been set aside with the next judgement expected later this month. Elsewhere, however, a further charge of £442 million relates mainly to the Commercial Banking business, where there has been a “small number” of individual cases moving into default territory.
“For the most part, however, there are any number of positives emanating from the update,’’ he added.
"The currently stable operating environment is allowing Lloyds to pursue its refocused strategy, especially on the digital front where a further 3 per cent increase brings the total number of banking app users to 20.9 million, while also providing a springboard for further capital light growth. The group is also prioritising higher value areas, such as what it describes as the ‘Mass Affluent’ segment, deepening customer relationships and separately expecting in excess of £1.5 billion of annualised additional revenues from strategic initiatives from next year.”