Lloyds First-Half Profit Rises

Lloyds Banking Group Plc will consider paying special dividends and share buybacks after first-half profit climbed 38 percent, even as it took a 1.4 billion-pound ($2.2 billion) charge for improperly sold loan insurance.

Pretax profit rose to 1.2 billion pounds from 863 million pounds a year earlier, Lloyds said on Friday. That missed the 1.9 billion-pound average estimate of 20 analysts compiled by the bank. Britain’s biggest mortgage lender will pay an interim dividend of 0.75 pence a share.

Chief Executive Officer Antonio Horta-Osorio, 51, has eliminated jobs, strengthened capital and sold overseas assets to return Lloyds to profit in 2014. While the dividend may help attract investors as U.K. Chancellor of the Exchequer George Osborne prepares to sell Britain’s 15 percent stake with a sale to taxpayers, the CEO’s efforts to boost earnings have been undermined by surging costs for misconduct.

“We fully expect to be privatized in the next 12 months,” Horta-Osorio said. “The additional provision for payment protection insurance is disappointing” and “rebuilding customer trust remains key.”

The shares fell 1 percent to 85.17 pence at 8:09 a.m. in London. They have gained about 12 percent this year, giving the bank a market value of 61 billion pounds.

Source:Bloomberg