Highlights
Supporting and benefiting from the UK economic recovery; delivering benefits for customers and shareholders
Lending growth in key customer segments, and deposit growth in relationship brands
Launched our Helping Britain Prosper plan, formalising commitments to households, businesses and communities
Continue to invest in channels and products to meet customer needs whilst improving customer service
Further substantial increase in underlying profit and returns
Underlying profit increased 32 per cent to £3,819 million (up 58 per cent excluding St. James's Place)
Return on risk-weighted assets increased to 2.90 per cent (half-year to 30 June 2013: 1.95 per cent)
Underlying income of £9,252 million, up 4 per cent excluding St. James's Place effects in 2013
- Net interest income up 12 per cent, driven by margin improvement to 2.40 per cent
- Other income down 8 per cent given disposals and a challenging environment
Underlying costs down 2 per cent to £4,675 million, and down 6 per cent excluding FSCS timing effects
Impairment charge reduced 58 per cent to £758 million; asset quality ratio improved 39 basis points to 0.30 per cent
Statutory profit before tax of £863 million; tangible net asset value per share of 49.4p
Statutory profit before tax of £863 million, including charge for legacy issues of £1,100 million (half-year to 30 June 2013: £2,134 million)
Tangible net asset value per share increased to 49.4p (31 Dec 2013: 48.5p); down 1.3p in second quarter principally due to legacy charges
Reshaping and strengthening of Group to create a focused, low-risk business substantially complete
TSB Initial Public Offering successfully completed: 38.5 per cent sold
Run-off portfolio reduced by £8 billion in first half to £25 billion and international presence reduced to eight countries
Capital position further strengthened: fully loaded CET1 ratio of 11.1 per cent (31 Mar 2014: 10.7 per cent pro forma; 31 Dec 2013: 10.3 per cent pro forma) and total capital ratio of 19.7 per cent
Fully loaded Basel III leverage ratio of 4.5 per cent (31 Mar 2014: 4.5 per cent pro forma; 31 Dec 2013: 3.8 per cent pro forma)
Confident in delivering strong and sustainable returns: margin, impairment and run-off guidance enhanced
2014 full year net interest margin now likely to be around 2.45 per cent
Following strong first half performance, now expect full year asset quality ratio of around 35 basis points
Now expect run-off assets to be less than £20 billion by the end of 2014
Expect full year statutory pre-tax profit to be significantly ahead of the first half
Will apply to the Prudential Regulatory Authority (PRA) in the second half of 2014 to restart dividend payments
Strategic update will be presented to the market in the autumn
