Lloyds Banking Group sees profits soar amid strong mortgage lending

In the first half of 2025, Lloyds Banking Group, which operates Lloyds Bank, Halifax, and Bank of Scotland, reported a pre-tax profit of £3.5 billion. This figure marks a 5% increase compared to the same period last year. Analysts had initially forecast a profit of £3.2 billion, highlighting a stronger-than-expected performance driven by increased lending and savings accounts. The bank indicated that total lending to customers rose by £11.9 billion or 3%, with a significant rise in UK mortgage lending alongside approximately 33,000 first-time buyers getting loans. Additionally, customer deposits increased by £11.2 billion, attributed to a seasonal surge in ISAs and a trend of moving funds from current accounts to savings accounts. Further insights from Lloyds suggested that the group is also handling its motor finance business through its Black Horse division, confirming no changes to its provision set aside for potential costs related to commission arrangements. Charlie Nunn, CEO of Lloyds Banking Group, commented on the positive results, stating that the group continues to advance towards its 2026 goals while improving customer outcomes across the business. A smaller-than-expected impairment charge for bad loans also supported the profits reported, as the group had expected to set aside more funds but ended up needing less than forecasted. The interim dividend has been increased by 15% year-on-year, totaling £731 million, reflecting the strong financial performance. Lloyds' continuing efforts to adapt and grow amidst changing economic conditions further exemplify its aim to meet both customer and shareholder expectations. The positive earnings news comes amid discussions of varying profitability across sectors in the UK economy, as other industries, like energy, have reported sharp declines in profits. This report sets a positive tone for the banking sector, indicating resilience and potential growth amidst a complex financial landscape. The strong profit results from a major player like Lloyds may influence investor sentiment and expectations for upcoming financial disclosures from other banks and financial institutions, especially concerning lending trends and customer account behaviors.