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| Version 1 | Version 2 |
|---|---|
| Lloyds Banking Group back in profit in first half | Lloyds Banking Group back in profit in first half |
| (about 3 hours later) | |
| Lloyds Banking Group has returned to profit, after announcing it made £2.1bn ($3.2bn) in the six months to the end of June. | Lloyds Banking Group has returned to profit, after announcing it made £2.1bn ($3.2bn) in the six months to the end of June. |
| It compares with a loss of £456m for the same period last year. | It compares with a loss of £456m for the same period last year. |
| The bank said it had made substantial progress on strengthening its balance sheet, although "further work remains to be done". | The bank said it had made substantial progress on strengthening its balance sheet, although "further work remains to be done". |
| The bank, which is 39% owned by the UK government, increased its lending by 1%, or £3bn, over the first half. | The bank, which is 39% owned by the UK government, increased its lending by 1%, or £3bn, over the first half. |
| The bank's share price rose strongly on the news, notching up gains of nearly 8% by mid-morning. | |
| Share sale | |
| The bank said it would be talking to regulators in the coming months about resuming paying a dividend on its shares, which would pave the way for the government to sell off its £19bn stake. | The bank said it would be talking to regulators in the coming months about resuming paying a dividend on its shares, which would pave the way for the government to sell off its £19bn stake. |
| The minimum price that Chancellor George Osborne wants to sell the government's stake is 61p a share, but some think that figure is too low. | |
| Some analysts expect the chancellor to make an announcement regarding the sale as early as Thursday. | |
| "The chancellor said that he would be going for an institutional placing with retail to follow earlier in the year, so I would expect the institutional part of that to come out pretty quickly," said Gavin Oldham from stockbrokers Share Plc. | "The chancellor said that he would be going for an institutional placing with retail to follow earlier in the year, so I would expect the institutional part of that to come out pretty quickly," said Gavin Oldham from stockbrokers Share Plc. |
| "I would have thought that Lloyds would be quite keen to do that initial placing with the institutions as soon as possible, so we may see an announcement today, perhaps £5bn [worth of shares] or more," he added. | "I would have thought that Lloyds would be quite keen to do that initial placing with the institutions as soon as possible, so we may see an announcement today, perhaps £5bn [worth of shares] or more," he added. |
| Political pressure | |
| Meanwhile, Peter McNamara, a former head of personal banking at Lloyds TSB and the current chief executive of ATM operator Note Machine, told the BBC that the sell-off would start soon. | |
| "The political pressure, I think, is on for George Osborne to show a deficit reduction and to claim that this has been a profitable management of this bit of the banking sector back into non-state ownership and the state getting refunded, so I think there's good omens for something to happen fairly promptly on that," he said. | |
| However, the Chief Secretary to the Treasury, Danny Alexander, said the government would not be rushed and there was no set timetable for a sale. | |
| "The British taxpayer has invested billions of pounds in the banking system in order to rescue it from catastrophe, and we need to make sure that the taxpayers commitment is returned as we return these banks to the private sector," he told the BBC. | |
| Lloyds' chief executive, Antonio Horta-Osorio, said: "We are now well on track to create a bank with a leading cost position, lower risk, a lower cost of equity, and products and services focused on our customers' needs, to deliver strong, stable and sustainable returns to our shareholders." | Lloyds' chief executive, Antonio Horta-Osorio, said: "We are now well on track to create a bank with a leading cost position, lower risk, a lower cost of equity, and products and services focused on our customers' needs, to deliver strong, stable and sustainable returns to our shareholders." |
| Bad debts | |
| Bad debts at Lloyds fell 43% to £1.8bn, but the group had to make a further £450m charge to its accounts to cover the compensation for mis-selling of payment protection insurance (PPI). | Bad debts at Lloyds fell 43% to £1.8bn, but the group had to make a further £450m charge to its accounts to cover the compensation for mis-selling of payment protection insurance (PPI). |
| That means that, so far, the bank's total bill for PPI related costs is now £7.3bn. | That means that, so far, the bank's total bill for PPI related costs is now £7.3bn. |
| On the international front, Lloyds' cost-cutting programme continued in the first half of the year. | On the international front, Lloyds' cost-cutting programme continued in the first half of the year. |
| It has now closed branches and exited from 17 countries, as it looks to focus on its core UK market. | It has now closed branches and exited from 17 countries, as it looks to focus on its core UK market. |
| The bank's plan is to be operating in fewer than 10 countries by the end of next year. | The bank's plan is to be operating in fewer than 10 countries by the end of next year. |