Lloyds resumes dividend as profits bounce back
Lloyds (LON:LLOY) confirmed on Thursday that it swung to a H1 profit, as well as announcing an interim dividend.
Lloyds’ update closely follows that of rival Barclays, which posted positive earnings results yesterday for much of the same reasons.
“Put Lloyds results together with Barclays’ from the day before and you have the beginning of a trend in UK banking,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
“Massive swings in the level of bad loan provisions is flattering the bottom line, leading to a huge leap in profits for Lloyds this quarter. We expect that trend to continue for much of this year, assuming the outlook for the UK economy continues to brighten, but come 2022 the tailwind will have blown itself out – it will be up to banks to make their own weather.”
Lloyds made a profit before tax of £3.9bn for the six month period ending in June, which surpassed the average analyst forecast by £0.8bn.
Over the same period a year ago the banking giant made a H1 loss of £602m, having set aside billions as an insurance against bad loans caused by the pandemic.
Lloyds also confirmed a 0.67p interim dividend, while its share price rose by 0.79% to 47.15p per share. Since the turn of the year the Lloyds share price is now up by 35.33%.
Rob Murphy, Managing Director, Edison Group, also commented on Lloyds’ results.
“Today’s announcement that Lloyds had acquired Embark, a retirement platform business will help accelerate business momentum. This acquisition emphasises the Group’s continued commitment to expand its presence in the retirement and estate planning markets.”
“The past six months have identified the Group’s resilience, and with lockdown finally having eased, it comes as no surprise that guidance for the year has now been updated as the positive momentum looks set to continue. Following a string of new hires at the top of the business and with the Group now awaiting the arrival of its new CEO in August, the company looks to have settled on a senior leadership team. The combination of this and an impressive first half to the year, the outlook for customers, investors and other key stakeholders looks positive,” Murphy said.