Lloyds banking group has lifted its forecast for the year after the UK’s economic outlook has brightened in the past six months amid its vaccine rollout.
Statutory profit before tax hit £3.9bn in the six months to 30 June, a ‘significant’ increase from the first half of 2020.
The banking group has confirmed it bought financial services firm Embark, with its sturdy financial position, following talk of a deal in May.
While no figure has yet been put on the deal, it is expected to be worth some £390m.
Shares open higher following the announcement, up 1.3 per cent at 47.4p per share.
“During the first six months of 2021, the group has delivered a solid financial performance with continued business momentum, bolstered by an improved macroeconomic outlook for the UK,” interim group boss William Chalmers said.
“While we are seeing clear progress in the vaccine rollout and emergence from lockdown restrictions, the coronavirus pandemic continues to have a significant impact on the people, businesses and communities of the UK.”
The group has seen a 19 per cent increase in tactical retail savings accounts since the first quarter of this year, as customers are seeking to intentionally stash cash away now a holiday could be on the horizon – instead of accidentally saving amid restrictions.
After posting a rosier outlook, the group’s risk-weighted assets in 2021 are now expected to be below £200bn.
The group’s earnings per share have swung from a loss of 0.3p in the same period last year to earnings of 5.1p.
Dividends per ordinary share have lifted 0.10p since the end of December, at 0.61p per share.
Senior investment manager at Brewin Dolphin, Donald Brown, explained that “Lloyds is the most exposed of the major banks to the UK economy; but, backed by a strong balance sheet, it is taking measures to solidify its position and build for the future.
“The increase to the dividend is another step in the right direction for income investors, while the acquisition of digital savings group Embark will also add to the diversification of the bank’s offering for new and existing customers.”