LONDON (ShareCast) - Lloyds is very much back in the black after posting a profit of £1.6bn for the first half of 2010, twice as much as some analysts had forecast.
The bank, which lost almost £4bn this time last year and is still 41%-owned by the government, added that total impairments more than halved to £6.55bn from £13.40bn a year ago, largely driven by Wholesale.
Total income net of insurance claims increased by 5% to £12.48bn, mostly due to £6.6bn of new retail deposits. The retail business, which made a profit of £2.50bn, grew net interest income by 24% as mortgages continued to migrate onto standard variable rate products. The Wealth and International business was a drag though, losing £1.61bn during the period.
Lloyds will also hope that £14.9bn of gross new mortgages to UK homeowners and £23.7bn of committed gross lending to businesses will please chancellor George Osborne.
Meanwhile, the integration of HBOS continues to “progress well”, with a cost synergy run-rate of £1.08bn achieved by the end of June. The group says it’s on track to hit its £2bn target by the end of 2011.
“Based on our current projection of a slow but steady UK economic recovery and current regulatory context, we believe the group has strong medium-term prospects,” said finance boss Tim Tookey.
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