Lloyds Banking Group has posted a half-year profit of £863 million, despite setting aside another £600 million to cover mis-sold payment protection insurance (PPI).
The group, which is 25% owned by the taxpayer, said it "substantially improved" its financial performance in the six months to June 30, with profits excluding the PPI charge up 32% to £3.8 billion.
The overall profit of £863 million came despite a hit of £1.1 billion to cover legacy issues, including its £217 million fine this week for rate-rigging which included ripping off the Bank of England over its financial life-support scheme.
The group's £600 million increase in its provision for expected PPI costs in the second quarter brought the running total to £10.4 billion, of which more than £2 billion relates to anticipated administrative costs.
Lloyds is forecasting a slower decline in complaints levels, with the increased provision accounting for an extra 155,000 complaints.
Lloyds shares opened 1% higher after the group upgraded its net interest margin - a key measure of profitability - to around 2.45% for the full-year.
It added that it remains on track to restart dividend payments in the next year, subject to the approval of the Prudential Regulatory Authority.
Chief executive Antonio Horta-Osorio plans to issue an update on his proposals for the group in the autumn.
He said: "It has been a successful first half for the group. With our initial three-year strategic plan now substantially complete, we are progressing our plans for how we will take the group forward into 2015 and beyond, and take advantages of the new growth phase of the UK economy."
The Halifax owner said it provided one in four of all mortgages to first-time buyers in the first half, with lending of £5.7 billion to more than 43,000 customers.
Overall new mortgage lending was £20 billion - £6 billion higher than in the first half of 2013 - while it said it has lent almost £1 billion through the Government's Help to Buy mortgage guarantee scheme.
The company added that around 10% of its new residential mortgages were written at a loan-to-income ratio at or greater than a 4.5 multiple.
Royal Bank of Scotland, which is 80% owned by the taxpayer, said last week that it nearly doubled underlying profits to £2.65 billion in the first half of the year, despite an extra £250 million hit for mis-selling financial products.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article