Lloyds Banking Group, which has been part-owned by the UK taxpayer since the financial crisis, appears to be returning to brighter fortunes by reporting a statutory pre-tax profit of £2.134 billion.

Lloyds Banking Group, which has been part-owned by the UK taxpayer since the financial crisis, appears to be returning to brighter fortunes by reporting a statutory pre-tax profit of £2.134 billion (3.23 billion) in the six months to 30 June, bouncing back from a £456 million loss a year earlier.

With policymakers and investors pondering when and if the bank will be returned fully to private hands, Lloyds also reported a group underlying profit of £2.902 billion, versus £1.044 billion last year. The bank had a core Tier 1 capital ratio of 13.7 per cent at the end of June.

“We are now well on track to create a bank with a leading cost position, lower risk, a lower cost of equity, and products and services focused on our customers' needs, to deliver strong, stable and sustainable returns to our shareholders,” António Horta-Osório, chief executive, said in a statement.

In the wealth, asset finance and international segment – a unit including private banking – Lloyds logged an underlying loss of £101 million, narrowing from a £706 million loss, down 86 per cent, a year before.

The narrower loss was “primarily due to a £541 million reduction in impairments, strong banking net interest margins and lower costs, partially offset by a fall in income as a result of the balance sheet reduction together with the impact from the sale of approximately 37 per cent of St James's Place”, Lloyds said. (St James’s Place is a wealth advisory group in which the bank had had a substantial stake).