Investors appeared cheered by the figures from one of the UK's big banking groups yesterday.

Lloyds Banking Group, which provides services including private banking and wealth management, yesterday reported a statutory pre-tax profit of £3.5 billion ($4.74 billion) for the six months to 30 June, rising 5 per cent on the same period a year earlier.

Net income for the six-month period was £8.914 billion, rising 6 per cent. Operating costs were £4.874 billion, rising 4 per cent. 

Earnings per share stood at 3.8 pence per share, up from 3.4p. Return on tangible equity was 14.1 per cent, up from 13.5 per cent.

The banking net interest margin was 3.04 per cent, widening 10 basis points from a year earlier.  

At the end of June, Lloyds Banking Group's Common Equity Tier 1 ratio – a standard international measure of a bank’s capital buffer – was 13.8 per cent.

The bank’s insurance, pensions and investments business include Lloyds’ mass-affluent and wealth strategy, although the lender gave relatively few details on financial performance of its wealth arm. Insurance, pensions and investments achieved an underlying profit, before impairments, of £144 million, rising 21 per cent on a year earlier.

“Lloyds is trotting along nicely as profits gallop past expectations. The reaction might be a little muted, though, given the lack of guidance upgrade off the back of a good set of numbers," Matt Britzman, senior equity analyst, Hargreaves Lansdown, said in a note. 

Like a number of its peers, Lloyds faces potential costs from litigation related to alleged mis-selling of motor finance. The UK bank has already set aside £1.15 billion in provisions for this issue. 

"Lloyds offers a blend of strong underlying performance and potential upside for those willing to take on some risk. It’s an important period, not just because of today’s results, but also because the Supreme Court is expected to make a judgment on the motor finance case soon," Britzman said. 

Shares in Lloyds Banking Group have risen 43 per cent since the start of the year. Yesterday, they rose 1.5 per cent on the day, as of around 15:00 UK time.

In early July, WealthBriefing spoke to Tangwena Nelson, managing director, head of asset and wealth managers, about the Lloyds Banking Group wealth management strategy.