Lloyds reports first-half profit up 23%, outlines new AI-driven strategy
Strong Financial Performance and Strategic Initiatives
LONDON, July 30 (Reuters) - Lloyds Banking Group reported a better than expected statutory pretax profit of £4.3 billion for the first half of 2026, as CEO Charlie Nunn also outlined the lender's next plan to grow its core businesses and harness technology such as AI to cut costs.
Shareholder Returns and Dividend Growth
Lloyds also announced a £1 billion share buyback, in addition to the £1.75 billion it announced alongside its full-year results in February, and increased its interim dividend payment 30% to 1.58 pence per share.
Strategic Plan Through 2030
The bank's latest strategic plan, which will run through to 2030, will see it evolve its existing businesses, rather than a radical shift in direction.
AI and Technology-Driven Cost Savings
Nunn said Lloyds will harness technology such as AI to deliver around £2 billion in cost savings, growing its agentic AI business and speeding up the time it takes to bring new such products to market.
Growth Targets and Business Expansion
The bank is targeting a return on tangible equity of around 20% in 2030, it said, growing its traditional businesses such as retail banking, mortgages and commercial banking while expanding into higher value fee-generating areas.
International Expansion and Investment Banking
Lloyds will also pursue a "focused international expansion" in its corporate and institutional bank, Nunn said, marking a return to selected cross-border investment banking activities that British lenders such as Lloyds and NatWest, then known as RBS, built up in the years before the 2008 financial crisis.
Previous Strategic Focus
The new strategy succeeds the lender's previous plan which ran from 2022 to 2026, and focused on reducing the group's reliance on traditional mortgage and deposit banking by growing fee-generating businesses and other non-interest income streams.
Analyst Forecasts and Profit Comparison
The bank's profit for January to June was above an average analyst forecast of £4.12 billion and the bank's £3.5 billion profit in the same period last year.
(Reporting by Lawrence White, Editing by Louise Heavens, Editing by Louise Heavens)
