Lloyds CEO Charlie Nunn says on Bloomberg TV

Lloyds CEO Charlie Nunn says on Bloomberg TV

Lloyds Banking Group Plc continued to benefit from higher interest rates in the second quarter, helping the bank to beat earnings expectations and return £731 million ($992 million) to shareholders via its dividend. The British bank posted a pretax profit of £1.99 billion for the three months through to June, a rise of 17% on a year ago, and ahead of the £1.75 billion analyst estimate compiled by Bloomberg [1].

The results got a boost from interest rates falling more slowly than previously expected, enabling banks to earn more on deposits. The bank raised its interim dividend by 15%. Lloyds also affirmed its guidance for the year and said it was confident in guidance for 2026. "We continue to make great progress," Chief Executive Officer Charlie Nunn said in the statement. He said it was "income growth, cost discipline and robust asset quality, driving strong capital generation and increased shareholder distributions" [1].

Lloyds took an underlying impairment charge of £133 million during the quarter, smaller than expected by analysts, as the bank tries to anticipate the impact of the sluggish UK economy and global headwinds on borrowers’ repayments. Future of Car Loans Lloyds, the country’s largest provider of car loans, didn’t take any further provisions for the Financial Conduct Authority’s ongoing probe. The bank announced in February it had set aside a total of £1.15 billion for possible compensation and other costs. The watchdog has been investigating whether millions of consumers took out loans without being fully aware of commission that lenders paid car dealerships [1].

A UK Supreme Court ruling on which customers should be compensated for hidden commission is due this month, with news on a redress program expected from the FCA soon after. Lloyds has cautioned that it’s uncertain about the final cost until these decisions are clear. Since the financial crisis, Lloyds has withdrawn from riskier activities and focused on mostly domestic retail and corporate services. Nunn has targeted growth in wealth and insurance to diversify the bank’s income [1].

Lloyds is the first major UK bank to report second-quarter earnings, with NatWest Group Plc, Barclays Plc and HSBC Holdings Plc due to follow over the coming week.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-24/lloyds-raises-interim-dividend-as-higher-rates-boost-earnings