Lloyds Banking Group half-year profits over £2bn

The group reported pre-tax profits of £2.1bn in the first six months of 2013 against losses of £456m a year earlier

Lloyds
Lloyds

Lloyds Banking Group said it was ready for the Government to fire the starting gun on the sale of its 39% stake after swinging out of the red with half-year profits of more than £2bn.

Antonio Horta-Osorio, chief executive of Lloyds, said it was now up to the Government to decide “when and how” to sell off its stake amid mounting speculation over an imminent share sale.

The group reported pre-tax profits of £2.1bn in the first six months of 2013 against losses of £456m a year earlier.

Its marked recovery came as taxpayer-backed Lloyds slashed costs further and saw a 43% plunge in bad debts, to £1.8bn.

Lloyds also flagged up another milestone in its return to health yesterday as it said it would hold talks with regulators in the second half of 2013 over a timetable for reviving shareholder dividend payouts.

It has not paid a dividend since mid-2008. Shares leapt 8% to their highest level since October 2010, more than 10p above the 61p minimum level at which the State would break even on its bailout and around the 73.6p actual average price paid at the time of the bank’s �20.3bn government bail out.

Chancellor George Osborne confirmed in June that the Government would look to offload its stake in Lloyds and it is thought the Treasury is working on plans to place a 10% stake with institutional investors, potentially within days.

Mr Horta-Osorio said: “It is up to the Government to decide how and when to do it. I believe we have completed the first phase... the share price is now in a position where the Government can return taxpayers’ money at a profit.”

But Lloyds revealed it is still yet to draw a line under the PPI mis-selling scandal as it reported another �500m in costs and said it was under investigation by the Financial Conduct Authority (FCA) over complaints handling. The group put by a further �450m to cover PPI claims, with �50m set aside to cover administration costs for the FCA probe, taking its total bill to a mammoth �7.3bn.

The investigation comes after an undercover newspaper investigation claimed that call centre staff at a Royal Mint Court site in London were encouraged to delay and deny compensation requests in the hope they would be dropped.

Lloyds ditched Deloitte – one of three PPI complaints call centre handlers – in May after the report.

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