The UK banking group set out its interim results last week and detailed some of the costs and changes associated with its full acquisition of Schroders Personal Wealth, now known as Lloyds Wealth. It also shed light on bank staff productivity and the impact of AI.

Last week, Lloyds Banking Group announced a 23 per cent rise in statutory profit after tax for the six months to the end of June this year, reaching £3.123 billion ($4.19 billion). Underlying profit rose 18 per cent to £4.125 billion, it said in a statement. 

The statutory pre-tax profit rose 23 per cent to £4.293 billion, ahead of analysts’ forecasts, reports said. 

Total costs were flat at £4.915 billion; net income for the first half of the year was £9.747 billion, the lender said. Restructuring costs rose to £34 million from £9 million. 

The bank noted in its costs data that inflationary pressures and the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) in the fourth quarter of 2025 was offset by continued cost savings, a lower severance expense and plateauing investment as its strategic cycle culminated.

Lloyds set out priorities of its Accelerate 2023 programme, covering segments including wealth management. 

“Through Lloyds Wealth we will also deliver a connected end-to-end wealth offering, helping all customers build, manage and transfer wealth with an integrated lifetime proposition from execution only D2C investments to, Invest AI (a new AI-enabled service to bring simple advice to all), and full-advice financial planning,” Charlie Nunn, group chief executive, said in the statement. 

(Editor’s comment: The jump in H1 profits by one of the UK’s largest banks, and the gains logged last week by Barclays, NatWest Group and Standard Chartered might prompt talk that newly-installed UK Prime Minister Andy Burnham and his Chancellor John Healey might consider a possible “windfall” profits levy on banks. In a scramble for revenue when spending decisions are politically tough, the temptations are obvious. They should be resisted, particularly if this government wants to be taken seriously about having a growth agenda. A solid UK banking sector is also a bright spot for the stock market and millions of ordinary investors.)

Capital buffer, dividend increase
The UK-listed bank said it had a Common Equity Tier 1 ratio of 13.6 per cent at the end of June, up from 13.4 per cent a year before (the ratio is a standard international barometer of a bank’s “shock absorber” capital).

Lloyds said its board has recommended a hike to the interim ordinary dividend of 1.58 pence per share, equivalent to £918 million, which is an increase of 30 per cent compared with the first half of 2025. This “significant step-up,” the bank said, reflects its efforts to “derisk the business,” our strong capital position and confidence in the future earnings trajectory of the group.

Since the start of January, shares in the lender have risen by more than 17 per cent. 

Lloyds stressed the bank’s productivity growth.

“The group has also maintained a clear focus on cost and capital discipline. With the benefits of investments, we have generated over £2 billion of gross cost savings between 2022 to 2026 by improving productivity and efficiency, modernising the technology estate, digitising more interactions and rationalising our office footprint. This is demonstrated by the more than 45 per cent improvement in the number of retail customers served per FTE [full-time employee],” it said.

“Our progress is underpinned by a transformation in how the group operates, radically enhancing our infrastructure, reducing data centres by more than 50 per cent and migrating more than 60 per cent of applications to the cloud. We have hired around 11,000 technology and data specialists to drive digital and AI leadership and recently announced that GenAI is expected to deliver over £100 million of benefit in 2026,” Lloyds continued.