Lloyd’s on the road to recovery

Taxpayer-backed Lloyds Banking
Group has kept up the momentum of the British banking recovery, unveiling
first-half profits of $2.5 billion.

The sum was twice the $1.2 million
figure predicted by analysts and represents a sharp bounce-back from the $6.3
billion losses seen a year earlier.

The improvement was partly down to
vastly reduced write-down’s, with loan impairments coming in at under $10.4
billion – less than half the $21.2 billion it suffered in the same period last

Lloyds said it had seen strong
trading against the backdrop of a stabilising economy – and it expects to
deliver a strong medium-term performance as the recovery continues.

It said it has passed a
“significant milestone”, with the toxic-loan legacy of its HBOS
takeover beginning to fade and the bank “on track” to achieve its
target of $3.1 billion in synergies from the deal by 2011.

But the return to profit is likely
to crank up pressure on the bank, which is 41 per cent owned by the Government,
to increase lending.

Lloyds ended the first half of 2010
slightly ahead of targets on that score, with $38 billion of gross lending to
business in the period.

But that may not be enough to
silence critics who say the likes of Lloyds and bail-out peer RBS must do more,
with net lending by Lloyds remaining flat.

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