Lloyds Banking Group PLC on Thursday said it remained on track to hit its annual targets, despite a subdued first half which saw revenue and profit decrease.

In the half-year to June 30, the Edinburgh-based lender said net income fell 9.6% to £8.39 billion from £9.19 billion a year prior. Within that net interest income fell 9.4% to £6.34 billion from £7.00 billion. Pretax profit dropped 14% to £3.32 billion from £3.87 billion.

For the second-quarter, net income declined 8.4% to £4.15 billion from £4.53 billion a year prior. Pretax profit, however, rose 5.3% to £1.70 billion from £1.61 billion.

Chief Executive Charlie Nunn said the results were ‘robust’ with ‘solid income performance and cost discipline alongside strong capital generation’.

‘We remain on track to meet our 2024 targeted outcomes. Indeed, our progress to date enables us to reaffirm 2024 guidance and remain confident in achieving our 2026 strategic objectives and guidance,’ he added.

For 2024, the bank expects operating costs of around £9.4 billion, a return on tangible equity of around 13% and to pay down to a CET1 ratio of around 13.5%.

Operating costs in the six months rose 6.6% to £4.70 billion from £4.41 billion. As a result, the cost income ratio rose to 57.1% from 48.8%. Encouragingly, impairments fell to £101 million from £772 million.

The CET1 capital ratio improved to 14.1% from 13.9%. Lloyds pointed out this is significantly above its ongoing target of around 13% per cent by 2026. But the return on tangible equity ticked down to 13.5% from 16.6%.

The net interest margin declined to 2.94% from 3.18% and Lloyds expects a full-year margin of greater than 290 basis points.

The firm lifted its interim dividend by 15% to 1.06 pence per share from 0.92p.

Shares in Lloyds eased 1.1% to 59.01 pence in London on Tuesday. They are up 23% in the year-to-date.

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