Lloyds Banking Group Reports Strong H1 2025 Earnings, Delivers Growth Opportunities and Improved Operating Leverage

Lloyds Banking Group reported strong H1 2025 results, with continued progress in its transformation. The group delivered strong outcomes for all stakeholders, with attractive growth opportunities and improved operating leverage across its businesses. CEO Charlie Nunn highlighted the group's strategy, which supports the real economy and provides customers with leading propositions. CFO William Chalmers will provide a detailed financial overview before the group takes questions.

Lloyds Banking Group (LSE:LON:LLOY) has reported robust H1 2025 results, showcasing continued momentum and strategic progress. The group delivered a statutory profit after tax of £2.5 billion, up 4% year-over-year, driven by growth in net interest income and other income sources [1].

The bank's performance was buoyed by improving UK economic conditions, with strengthening household finances and returning business confidence creating favorable conditions for growth [1]. Net income reached £8.9 billion, up 6% compared to H1 2024, driven by a 5% increase in net interest income to £6.7 billion and a 9% rise in other income to £3.0 billion [1].

Operating costs increased by 4% year-over-year to £4.9 billion, though the bank noted this would be approximately 2% excluding front-loaded severance costs. This represents an improvement from the 6% year-over-year cost increase reported in Q4 2024, suggesting better cost control in recent months [1].

Total lending increased by 3% year-to-date to £471.0 billion, with mortgage balances up £5.6 billion to £317.9 billion. Commercial banking lending grew by £1.2 billion in H1, or £2.0 billion when excluding government lending repayments [1]. Deposits increased by 2% year-to-date to £493.9 billion, with commercial deposits showing particularly strong growth of 5% in H1 [1].

The bank's capital position remains strong with a pro forma CET1 ratio of 13.8%, providing substantial capacity for continued business growth and shareholder returns [1]. The interim dividend was increased by 15% year-over-year to 1.22 pence per share, with the bank announcing £7.7 billion in share buybacks since the end of 2021, reducing its share count by approximately 16% [1].

Lloyds is making significant progress on its strategic priorities for 2025-2026, focusing on deepening customer relationships and driving growth in targeted areas. The bank has launched new propositions such as Lloyds Premier and established new partnerships with General Motors (NYSE:GM) and Xpeng (NYSE:XPEV) Motors [1].

Digital transformation remains a key focus, with over 20.9 million mobile app users (up 3% year-to-date) and more than 95% of retail sales now conducted through digital channels. The bank is leveraging artificial intelligence, with approximately 30 major GenAI use cases delivering benefits to customers and colleagues [1].

Lloyds Banking Group's H1 2025 results demonstrate sustained financial strength and strategic progress, positioning the bank well to deliver on its medium-term targets despite the evolving economic environment. With its focus on digital transformation, targeted growth areas, and disciplined cost management, the bank appears well-positioned to continue delivering value to shareholders.

References:
[1] https://www.investing.com/news/company-news/lloyds-banking-h1-2025-presentation-profit-up-4-dividend-increased-15-93CH-4149709
[2] https://seekingalpha.com/article/4804736-lloyds-banking-group-plc-2025-q2-results-earnings-call-presentation
[3] https://www.lloydsbankinggroup.com/insights/reimagining-the-future-how-ai-is-transforming-lloyds-banking-group.html