Lloyds Banking Group Plc beat forecasts in the second quarter and lifted its guidance for the year as it released further provisions it had set aside for loans going bad during the pandemic.
Pretax profit of 2 billion pounds ($2.8 billion) came in ahead of analyst expectations for 1.4 billion pounds, according to a consensus compiledby Bloomberg, and compares to a loss in the same period last year. The bank released 333 million pounds from its loan loss provisions, more than expected.
“During the first six months of 2021, the group has delivered a solid financial performance with continued business momentum, bolstered by an improved macroeconomic outlook for the UK,” said
Chief Financial Officer William Chalmers, who’s also interim chief executive before HSBC Holdings Plc’s wealth head Charlie Nunn takes over in mid-August.
Lloyds also said it would pay an interim dividend worth 0.67 pence after the Bank of England removed restrictions imposed at the height of the pandemic to make sure lenders could weather deep losses. Shares in the London-based bank rose as much as 2.4% in early trading.
Britain’s biggest mortgage lender said demand for home loans continued to strengthen, boosting its open mortgage book by 2% in the quarter to almost 290 billion pounds.
For the rest of the year, Lloyds has upgraded its outlook, citing the vaccination program and end of lockdown restrictions. The company also confirmed it was buying savings group Embark for 390 million pounds, in a move that will boost its online services for mass-affluent customers. Lloyds said the deal meant it could raise its targets for new money over the next two years, to 40 billion pounds from 25 billion pounds previously.