Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001654954-25-008460
Chunk: 5

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 5
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 franchise, enhanced digital capabilities and a clear focus on execution, we are well positioned to generate higher, more sustainable returns. Given that, we reaffirm our 2025 guidance and remain confident in our 2026 commitments.

**Sustained strength in financial performance supporting higher interim dividend**

Statutory profit after tax was £2.5 billion, up 4% year on year, with higher underlying profit of £3.6 billion, driven by 6% growth in net income, partially offset by slightly higher operating costs and impairments. Net income of £8.9 billion benefitted from an increased banking net interest margin of 3.04% and growth in underlying other income of 9% as we continue to drive progress through our strategic initiatives. Operating costs of £4.9 billion increased 4%, or 2% excluding front-loaded severance costs, in line with expectations. This reflected inflationary pressures, strategic investments and business growth partly offset by cost savings. Asset quality remained robust, with a stable performance across our portfolios. Overall, this resulted in a return on tangible equity of 14.1%.

The Group's balance sheet grew in the first six months of the year. Underlying loans and advances to customers of £471.0 billion were up £11.9 billion (3%). This strong performance reflected growth in Retail, led by UK mortgages, alongside growth in Corporate and Institutional Banking. Customer deposits of £493.9 billion also significantly increased by £11.2 billion (2%) in the first half. This included growth in Retail of £3.7 billion, driven by savings, and Commercial Banking of £7.6 billion, driven by growth in targeted sectors.

The Group delivered strong capital generation of 86 basis points in the first half of the year, in line with our full year guidance of c.175 basis points, with a pro forma CET1 ratio of 13.8%. Given the strength of the capital generation and CET1 position, the Board has announced an interim ordinary dividend of 1.22 pence per share, up 15% on the prior year and equivalent to £731 million.

#### Guiding purpose of Helping Britain Prosper
The fundamentals of the UK economy are robust and we welcome the ambition of the recently launched industrial strategy and financial services reforms by the UK government. Our purpose, embedded throughout our franchise, allows us to play a vital role in promoting UK prosperity whilst accessing new commercial growth opportunities for the Group, helping us build a more resilient and profitable business.