Lloyds Banking Group (NYSE:LYG) reported today the results for the half-year ended 30 June 2014. During this period, while the UK government reduced its shareholding to 24.9%, LYG has successfully sold 39.5% of TSB through an effective Initial Public Offering. I'm going to mention below the most important items which will be compared with H1 '13.
Underlying profit increased 32% to £3,819 million ($6.45B), and return on risk-weighted assets increased to 2.90% from 1.95%. Net interest income grew by 12% due to higher lending activity, and an improvement in the net interest margin of 39 basis points to 2.40%. Statutory profit before tax for the period was £863 million ($1.46B) representing a reduction of £1,271 million ($2.15B). In fact, the bank had to include legacy charges of £1,100 million ($1.86B), and in H1 '13 it had profited £780 million ($1.32B) from a sale of government bonds.
In my original article I've stated that Lloyds Banking Group was solving, year after year, many of its past problems. LYG's strategy was meant to get financial recovery and reinforce strongly the balance sheet. It's obvious that substantial progress has been made, and the bank seems on track to resume gradually dividend payments.
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