Lloyds Banking Group has reported a 23 per cent rise in profits and unveiled plans for a new digital strategy focused on artificial intelligence (AI).
Pre-tax profits reached £4.3 billion for the first half of 2024, up 23% on the same period last year.
Charlie Nunn, chief executive of Lloyds Banking Group, said: “We are successfully completing our 2022 to 2026 strategy, focusing on customer experience, pivoting the group to growth and laying the foundations for our exciting new strategy.
“We have strengthened our market leadership, built our digital and AI capabilities, and enhanced our cost and capital leadership, while remaining on track to deliver our 2026 financial targets.
Lloyds decided to scrap the Halifax brand and change it to Lloyds. (Image: Ben Gingell/Getty)
“This ensures the group is well placed to launch our new strategy, Accelerate 2030, from a position of strength.”
The lender’s improved performance was driven by higher income, tighter cost controls, and growth in both customer lending and deposits.
Lloyds is on track to deliver more than £2 billion in gross cost savings between 2022 and 2026, with an additional £2 billion targeted by 2030.
The savings will come through further digital transformation, modernising technology, and expanding the use of AI across the organisation.
Mr Nunn said AI could enable Lloyds to offer entirely new digital services, including more tailored financial advice.
He said: “We do think that there are new opportunities with agentic AI to both differentiate our services and grow more efficiently, i.e. provide services we’ve never been able to provide.
“So being able to provide investment advice to anyone in the UK that wants to talk to us with really well-trained agents.
“And also be able to do work differently and more efficiently internally.”
However, the bank’s deeper push into generative AI has sparked concerns over potential job losses.
While Mr Nunn said the group does “not put targets around numbers of staff,” he acknowledged that the shift will “impact work” across the organisation.
He said: “It is going to impact work, it is going to require us to continue to reskill people and hire new people.
“But that’s been my history for 30-odd years in financial services.”
Under its new ‘Accelerate 30’ strategy, Lloyds will invest more than £13 billion over the next four years to transform how customers manage their money.
This includes new products such as the recently announced Lloyds Smart Wallet, which will offer alternative payment options and rewards.
Since 2022, Mr Nunn has led the bank through major changes, including the expansion of digital banking, increased use of AI, growth in its wealth management division, and the closure of hundreds of branches.
More recently, Lloyds decided to scrap the Halifax brand and change it to Lloyds.
Mr Nunn said the bank is on track to achieve its 2026 financial goals and is launching its next phase of growth from a “position of strength.”
The group’s strategy aims to keep pace with rapid changes in customer expectations and the wider banking landscape.
