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Lloyds Banking Group delivers £2.2bn profit after £1.5bn digital investment in H1

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  • 31/07/2019
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Lloyds Banking Group has delivered £2.2bn in profits in the first six months of the year and is half way to spending £3bn on digitising the group, according to interim results out today.

 

The bank confirmed statutory profit after tax of £2.2bn, despite an additional Payment Protection Insurance charge of £650m.

The results did not confirm a gross mortgage lending figure but showed the group made loans and advances worth £441bn, adding its open mortgage book grew £800m in the second quarter ending 30 June. The group said it expects its open book, or mortgages still ‘open for applications’ this year to be in line with 2018.

Data on 2018 mortgage lending figures out yesterday confirmed the biggest six lenders accounted for more than £11bn in increased lending last year, with Lloyds Banking Group remaining the biggest lender representing £42.5bn, up by £1.5bn, with a 15.8 per cent market share.

 

Strategic plans

Group chief executive, Antonio Horta Osario, said the bank remained committed to a multi-brand, multi-channel approach and has increased its digitally active customer base to 15.9m, of which 9.8m are mobile app customers.

While 75 per cent of products are now initiated via digital channels, branches remain a vital channel for meeting customers’ more complex needs, said the bank.

Lloyds confirmed mortgages sold through bank branch had increased by three per cent since the start of 2018 and that it planned to introduce wealth capabilities to branches through Schroders Personal Wealth, a financial planning service for those with over £100,000 sole income.

Osario said: “We have continued to increase our investment in technology. This now represents 19 per cent of operating costs, up from 16 per cent in 2018, with more than 70 per cent of this amount relating to enhancing existing capabilities and creating new ones.

“This investment is enabling us to improve the experience of our customers and colleagues, while also driving operational efficiencies that will support increased investment going forward.”

 

Mobile app

The bank has introduced a mobile app, which includes a virtual assistant, which is already solving 25 per cent of messaging queries and a payments system to help customers budget better.

The bank also reduced its operating costs by three per cent as efficiency savings outstripped investment – however, impairment increased 21 per cent as a result of some weakening in used car prices, alignment of credit card methodologies and lower cash recoveries following prior year debt sales.

 

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