Lloyds Banking Group has unveiled a big rise in third quarter profits as the lender hailed a strong financial performance, boosted by healthy trading at the Halifax, which it bought at the height of the financial crisis.
The company said pre-tax profits more than doubled to £1.95bn in the three months to September 30.
The group’s trading update comes as the bank and former bosses face accusations in court from shareholders that they were “mugged” during the takeover of Halifax Bank of Scotland in 2008. Lloyds is vigorously denying the claims.
Current trading at the Halifax is strong following a number of initiatives to attract new customers and retain existing ones.
Halifax managing director Russell Galley said: ”Halifax entered the second half of 2017 on a high following a strong contribution to Lloyds Banking Group in the first half of the year, and we have kept our mojo by continuing to innovate with an impressive set of campaigns all focused on one goal – to help make customers better off.
“Our Loan with a Twist introduced earlier this year has got off to a flying start, putting 10 customers into a draw to have their Halifax personal loans paid off in full every month. Meanwhile, our Cashback Extras scheme has been hugely successful, paying out £1.8m in the first half of 2017, with lots of popular high street brands taking part.“
The Halifax is currently running two offers in tandem: £125 to switch current accounts and £750 cashback on mortgages.
“This is another win win for customers, not only with everyday banking but also with their mortgage – which is often the biggest financial commitment we will make in a lifetime,” said Mr Galley.
Over the period, the Halifax was the most popular bank for customers looking to switch their accounts.
“We love being the most switched-to bank on the high street, but we are constantly looking for more ways to be there for our customers,” said Mr Galley.
“We recently launched the first of our new branch formats in Huddersfield, giving colleagues more flexibility to help customers with a wide range of banking services.
“We know our customers value the expertise and guidance branch colleagues provide when facing more complex financial decisions. In an increasingly digital world, online-only banks can’t offer the welcoming smile, trusted handshake or sense of security on which we pride ourselves.“
The Huddersfield branch redesign is part of the Halifax’s investment in its network as it adapts in line with customers’ changing needs.
“We’ll be taking the feedback we get from local customers and colleagues to shape future designs of branches across the country,” said Mr Galley.
Lloyds Banking Group’s third quarter profit was up from £811m in the same period last year, when Lloyds was hit by payment protection insurance (PPI) provisions. Underlying profit for the period nudged up from £1.9bn to £2bn and Lloyds raised its financial targets for 2017.
Lloyds’ chief executive Antonio Horta-Osorio said the UK economy remains resilient, although he admitted there has been some “softening” in consumer confidence following the collapse in the pound.
He added that although consumption is down as a result, exports will be boosted by sterling’s depreciation and pointed to record high employment.
Mr Horta-Osorio said that with inflation soaring, raising interest rates from 0.25 per cent to 0.5 per cent is the “right thing to do”.
Markets expect the Bank of England to raise interest rates next month and his comments come as GDP figures for the third quarter beat expectations, coming in at 0.4 per cent.
Mr Horta-Osorio said he is comfortable with the position of the group’s motor finance arm, despite concerns of rising levels of consumer debt.
The results build on a strong run of form for Lloyds, which was fully returned to private hands in May, nearly nine years after the Government bailed it out.