Lloyds Banking Group (LLOY) Q2 2024 earnings summary

Executive summary

• Delivered robust H1 2024 financial performance with strong capital generation, increased interim dividend, and progress on strategic transformation, including digital leadership and operational efficiency.

• Statutory profit after tax was £2.4bn, down 15% year-over-year, with net income of £8.4bn, down 9%, and operating costs up 7%.

• Strategic initiatives generated £0.7bn additional revenues and £1.2bn gross cost savings in H1.

• Supported customers with £6bn in Cash ISA flows, >£7bn lent to first-time buyers, and £38bn in sustainable finance since 2022.

• Reaffirmed 2024 guidance and remain confident in delivering higher, sustainable returns by 2026.

Financial highlights

• Net income for H1 2024 was £8.4bn, down 9% year-over-year; Q2 net interest margin (NIM) at 2.93%, slightly down from Q1.

• Statutory profit after tax £2.4bn for H1; return on tangible equity (ROTE) 13.5%.

• Operating costs of £4.7bn, up 7% year-on-year; cost-to-income ratio at 57% (56% excluding remediation).

• Interim ordinary dividend increased by 15% to 1.06p per share.

• Loans and advances to customers grew by £2.7bn to £452.4bn; customer deposits increased by £3.3bn to £474.7bn.

Outlook and guidance

• 2024 guidance reaffirmed: NIM expected to be above 290bps, operating costs c.£9.4bn, asset quality ratio <20bps, ROTE circa 13%, capital generation c.175bps, and CET1 ratio to pay down to c.13.5%.

• Confident in achieving >15% ROTE and >200bps capital generation by 2026.

• RWAs expected between £220bn and £225bn at year-end 2024.