Lloyds Banking Group has reported statutory profit before tax of £2.45bn for the first half of 2016, a surge of 106% compared to £1.19bn the year ago.
The bank attributed the rise in profit to a significant reduction in conduct charges and the gain on sale of its stake in Visa Europe.
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The bank's underlying profit for the period stood at £4.16bn, a decrease of 5% from £4.38bn in the prior year.
Lloyds Banking Group CEO Antonio Horta-Osorio said: “We have delivered a good financial performance in the first half of 2016, with robust underlying profit, a doubling of statutory profit and strong capital generation, along with continued progress on our strategic initiatives. Our differentiated, UK focused, retail and commercial business model continues to deliver, and our financial strength, coupled with our cost leadership and low risk approach, position us well in the face of current market uncertainty.”
For the first half ended 30 June 2016, net interest income increased 1% to £5.78bn from £5.71bn the year earlier. Total income dipped 1% year-on-year to £8.87bn from £8.97bn.
The group's leverage ratio at the end of 30 June 2016 was 4.7%.
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By GlobalDataHorta-Osorio added: “The impact on the Group of the EU referendum is dependent on economic and political outcomes, which remain uncertain. However, in 2016 we now expect to generate around 160 basis points of CET1 capital pre dividend, due to the impact of the EU referendum, in particular the effect of FX rates on risk-weighted assets.
“Given the uncertainty, it is too early to determine the impact on our formal longer term guidance at this stage. However, while the business will remain highly capital generative, it is possible that this capital generation may be somewhat lower in future years than previously guided.”
