2026 half year results

 
RESULTS FOR THE HALF-YEAR
“Lloyds Banking Group continues to deliver for customers, colleagues, communities and shareholders. Our purpose of Helping Britain Prosper has never been more important. As the UK’s largest financial services provider, our purpose drives our strategy and creates opportunity for people and businesses, shaping finance as a force for good.
In the first half of 2026, we delivered sustained strength in financial performance, with continued income growth, improving operating leverage, strong credit performance, growing capital generation and increasing shareholder returns.
We are successfully completing our 2022 to 2026 strategy, focusing on customer experience, pivoting the Group to growth and laying the foundations for our exciting new strategy. We have strengthened our market leadership, built our digital and AI capabilities, and enhanced our cost and capital leadership, while remaining on track to deliver our 2026 financial targets.
This ensures the Group is well placed to launch our new strategy, Accelerate 2030, from a position of strength. Building on our leadership position we will accelerate through reimagined customer experiences, increased Group connectivity, and a productivity step-change, all enabled by pioneering technology. Our strategy will allow us to unlock the next phase of growth and sustainable value creation for our shareholders.”
Charlie Nunn, Group Chief Executive
Successfully delivering our purpose-driven strategy

• Successfully delivering the 2022 to 2026 strategy; growing market share in key areas, further improving our digital and AI leadership, and disciplined cost and capital optimisation
• Continuing to transform the Group, building digital engagement, modernising our infrastructure and delivering enhanced operating leverage, while tightly managing risk
• On track for £2 billion of strategic initiative income by the end of 2026, on track to deliver an 8% compound annual growth rate in underlying other income from 2021 to 2026, and have generated more than £2 billion of gross cost savings to date

• Launching Accelerate 2030 strategy; growing in core areas, innovating to deepen and diversify our propositions and further simplifying the Group

Sustained strength in financial performance¹

• Statutory profit before tax of £4.3 billion (half-year to 30 June 2025: £3.5 billion) benefitting from higher total income and controlled costs, partially offset by higher charges for operating lease depreciation and impairment. Return on tangible equity of 17.1%

• Underlying net interest income of £7.3 billion, up 9% year-on-year. Reflecting a higher banking net interest margin of 3.19%, up 15 basis points (up 5 basis points in the second quarter compared to the first quarter), due to strong structural hedge income, franchise-led volume growth and average interest-earning banking asset growth of 4% to £475.7 billion, partially offset by asset margin compression

• Underlying other income of £3.3 billion, 11% higher year-on-year. Driven by strengthening customer activity and the continued benefit of investments in strategic initiatives

• Operating lease depreciation of £841 million. Up 18% due to a charge in the second quarter for declines in used car prices alongside fleet growth and the depreciation of higher value vehicles, partially offset by continued risk mitigation

• Operating costs of £4.9 billion, flat compared to the first half of 2025. This reflected business growth costs, inflationary pressures and the full acquisition of Schroders Personal Wealth (now Lloyds Wealth) in the fourth quarter of 2025, offset by continued cost savings, a lower severance expense and plateauing investment as this strategic cycle culminates.  Remediation costs totaled £39 million across a small number of programmes

• Strong and stable credit performance. Underlying impairment charge of £617 million, resulting in an asset quality ratio of 25 basis points. This includes an £80 million net charge from updated multiple economic scenarios, compared to a small credit in the prior year

RESULTS FOR THE HALF-YEAR (continued)
Continued growth in lending and deposits

• Underlying loans and advances to customers of £491.5 billion increased by £10.4 billion (2%) in the first half of 2026. Growth across Retail of £5.0 billion (net of the impact of the securitisation of £1.8 billion of primarily legacy Retail mortgages in the second quarter) and Commercial Banking of £5.9 billion

• Customer deposits of £500.9 billion increased by £4.4 billion (1%) in the first half of 2026. Growth of £7.5 billion within Commercial Banking was partially offset by a reduction in Retail of £3.4 billion (mainly in the first quarter), primarily due to disciplined pricing decisions throughout the tax year-end

Strong capital generation driving increased capital returns

• Strong capital generation of 108 basis points. Primarily reflecting banking build partially offset by risk-weighted asset increases from the growth in lending. Pro forma CET1 ratio of 13.1% after the ordinary dividend accrual, announced share buyback in respect of the first half of 2026 and the completed acquisition of Curve

• Risk weighted assets of £241.8 billion, up £6.3 billion (3%) in the first half of 2026. Largely reflecting lending growth, partially offset by ongoing optimisation activity

• Tangible net assets per share at 30 June 2026 of 57.0 pence, in line with 31 December 2025. Attributable profit and a reduction in the number of shares in issue due to the ongoing share buyback announced in January 2026 were offset by capital distributions in respect of 2025 and increased longer-term rates impacting the cash flow hedge reserve

• Interim ordinary dividend of 1.58 pence per share (equivalent to £918 million), up 30% on the prior year, reflecting the steps taken to derisk the business, our strong capital base and confidence in the future earnings trajectory of the Group

• Alongside, the Board has announced its intention to implement a further ordinary share buyback programme of up to £1.0 billion, in addition to the £1.75 billion programme announced in the full year 2025 results

2026 guidance
Based on the sustained strength in our financial performance and our current macroeconomic assumptions, for 2026 the Group reiterates its guidance:

• Underlying net interest income of greater than £14.9 billion

• Cost:income ratio of less than 50% (including operating costs of less than £9.9 billion)

• Asset quality ratio of c.25 basis points

• Return on tangible equity of greater than 16%

• Capital generation of greater than 200 basis points²

• To pay down to a CET1 ratio of c.13.0%

2027 to 2030 guidance
Based on our current macroeconomic assumptions, from 2027 to 2030 the Group expects:

• Mid-single-digit net income compound annual growth rate and high-single-digit underlying other operating income compound annual growth rate

• Cost:income ratio of less than 45% in 2030, with year-on-year reductions

• Asset quality ratio of between 25 basis points and 30 basis points through the plan period

• Return on tangible equity of c.20% in 2030 and greater than 18% in 2028

• Capital generation of greater than 225 basis points in 2030²

• Pro forma CET1 ratio of c.13.0%³

¹   See the basis of presentation on page 100.
²   Excludes capital distributions.
³   Includes capital distributions announced in respect of the reporting period.
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