Despite the highly competitive mortgage market, the lender reported increased income and falling costs in the six months to the end of June 2018.
Lower levels of payouts for Payment Protection Insurance (PPI), despite another £550m set aside for the mis-selling scandal, and rising income from the purchase of credit card company MBNA, helped offset ongoing mortgage pricing pressure, the results showed.
Lloyds did not reveal its gross mortgage lending numbers, but its open mortgage book remained flat at £267.1bn.
The lender said it had invested significantly in additional mortgage advisers, to increase customer facing capacity by 10%.
The number of branches able to offer remote appointments has doubled to 100, Lloyds added.
At the same time, the lender has shortened the branch mortgage application process by two days, thanks in part to faster document processing and the roll out of automated valuations.
Digital ambitions
Lloyds said it had made a “strong start” to a programme announced in February to further digitise the group.
The group aims to increase efficiency and reduced its cost base along with more than £3bn of investment over the next three years.
The lender said the transformation will “exceed customer expectations” and help it succeed in a digital world.
António Horta-Osório, group chief executive, said: “We have delivered a strong and sustainable financial performance in the first half of 2018 with increased statutory profit, higher returns and a strong capital build.
“We have made significant progress in the last six months and are already delivering against the ambitious targets we set out in our new transformational strategy in February.
“As a simple, low risk, customer focused financial services provider we are well placed to succeed in a digital world and help Britain prosper.
“The UK faces a period of political and economic uncertainty in the run-up to the UK’s departure from the European Union, however the UK economy remains resilient and, excluding the impact of adverse weather, continues to demonstrate robust growth.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, added: “The huge jump in Lloyds’ reported profits can largely be summed up in just three letters – PPI.
“While the bank has taken another £550m hit in the first half of 2018, that’s around half what it had to put aside this time last year.
“Lloyds’ underlying profit growth shows the bank is in rude health. Revenues are up, costs are flat and bad loans are very low and expected to remain so.”
