Lloyds H1 earnings meet market forecasts with a 7% increase in underlying profit to £4.2bn for the first half.

Lloyds H1 statutory profit is up 38% to £2.3bn, boosted by flat operating costs and improved margins.

António Horta-Osório, Lloyds Banking Group CEO said: “There has been significant business progress including the successful delivery of Open Banking, the launch of Lloyds Bank Corporate Markets and the planned integration of MBNA and Zurich’s UK workplace pensions and savings business.

“In February we announced an ambitious strategy to transform the Group for continued success in a digital world. We have made a strong start in implementing the strategic initiatives which will further digitise the Group, enhance customer propositions, maximise our capabilities as an integrated financial services provider and transform the way we work.”

Lloyds H1 digital banking highlights

  • Digital customers rose to 13.8 million from 13.4 million a year ago;
  • Mobile banking users rose to 9.8 million from 9.3 million;
  • Average customer digital interactions increased to 16 visits per month;

Horta-Osório told analysts that Lloyds is increasing its investment on technology with a rise of 20% in fiscal 2018.

He said that the investment would generate further cost reductions and help Lloyds to  reduce its operating costs to less than £8b in 2020.

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Lloyds’ H1 highlights included an increase by 11 points in its net interest margin to 2.93 basis points.

Lloyds’ cost-income ratio improved by 4.2 percentage points from the year ago period to 47.7%.

Less positive metrics included yet another PPI provision for PPI of £460m in the second quarter. This takes half year PPI provisions to £550m.

Lloyds’ share price is down by 6.3% for the year to date.