Lloyds reports first-half profit up 23%, outlines AI-driven cost-cutting plans

Lloyds Banking Group reported a statutory pretax profit of £4.3 billion for the first half of 2026, up 23% from £3.5 billion a year earlier and above analyst forecasts of £4.12 billion, as CEO Charlie Nunn outlined plans to use AI to deliver around £2 billion in cost savings by 2030. The bank also announced a £1 billion share buyback and a 30% increase in its interim dividend to 1.58 pence per share.

Lloyds reports first-half profit up 23%, outlines AI-driven cost-cutting plans Lloyds also announced a £1 billion share buyback LONDON Lloyds Banking Group reported a better than expected statutory pretax profit of £4.3 billion US$5.74 billlion 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. 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 per cent to 1.58 pence per share. 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. Nunn said Lloyds will harness technology such as AI to deliver around £2 billion in cost savings, but declined to provide details on the impact this would have on jobs when asked by reporters on a call. “We don’t put targets around numbers of staff,” Nunn said. The bank is targeting a return on tangible equity of around 20 per cent in 2030, it said, growing its traditional businesses such as retail banking, mortgages and commercial banking while expanding into higher value fee-generating areas. Lloyds shares fell 0.5 per cent in early trading on Thursday morning, as analysts said the lender’s new targets were conservative. 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. 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. Lloyds’ results continue a strong run of earnings from Britain’s major banks, which have benefited in recent years from higher interest rates, resilient credit quality and robust capital generation. Investors’ attention will likely now turn to the extent to which new Prime Minister Andy Burnham may tax the sector further to help fund his ambitious policy plans, albeit those concerns were tempered by a Reuters report last Friday suggesting he will continue a finance-friendly agenda for now. Nunn declined to take a position on any such tax plans when asked by reporters on Thursday, saying the bank would “wait and see”. REUTERS Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services