Lloyds Banking Posts First-Half Profit

Lloyds Banking Group Plc, Britain’s biggest mortgage lender, posted its first profitable six-month period in three years as impairments for souring loans dropped.

Net income rose to 1.56 billion pounds ($2.4 billion) in the first half from a 697 million-pound loss in the year-earlier period, the London-based bank said in a statement today. Profit before exceptional items climbed to 2.9 billion pounds, beating the 2.34 billion-pound mean estimate of five analysts surveyed by Bloomberg. Impairments fell 43 percent to 1.8 billion pounds.

Lloyds’s shares have gained 43 percent this year on speculation the bank would return to profitability in 2013, following three years of losses and resume dividend payments it halted during the financial crisis. U.K. Chancellor of the Exchequer George Osborne may start selling the government’s 39 percent stake in the lender as soon as this month, a person familiar with the talks said last week.

“As consequence of significant progress made in strengthening the balance sheet we now expect to start talks with our regulators in the second half of this year on the timetable and conditions for dividend payments,” the bank said in a statement.

The stock rose 1.2 percent to 68.5 pence in London trading yesterday, above the 61 pence the government says it will break even after providing a 20 billion-pound rescue almost five years ago. Lloyds is the best-performing stock among its European peers in the past 12 months.

The lender said it booked a 450 million-pound charge in the period for compensating customers who were mis-sold payment-protection insurance.

(Source: Bloomberg)