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<\/p>\nLloyds Banking Group\u2019s boss has outlined a new four-year plan that will involve further investment in technology such as artificial intelligence (AI) to help deliver \u00a32billion in cost savings.\u00a0\u00a0<\/p>\n
The bank’s new strategy was unveiled with its half-year results, which saw its pre-tax profit jump 23 per cent to \u00a34.3billion and ahead of forecasts.<\/p>\n
Its second-quarter profits of \u00a32.3billion came in ahead of analyst expectations of \u00a32.1billion, as it booked \u00a35billion in revenue and slashed costs.\u00a0<\/p>\n
Chief executive Charlie Nunn said the bank had delivered ‘sustained strength in financial performance’, with income growth, controlled costs and increasing shareholder returns. The lender’s annual guidance remained unchanged.\u00a0<\/p>\n
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More tach: Lloyds Banking Group plans to use more AI across its operations\u00a0<\/p>\n
Lloyds said it was on track to have found more than \u00a32billion of gross cost savings between 2022 and 2026, and it was targeting a further \u00a32billion by 2030.\u00a0<\/p>\n
It hopes to achieve this by continuing its digital transformation, modernising the bank\u2019s technology, and further deploying AI across its operations.\u00a0\u00a0\u00a0\u00a0<\/p>\n
The FTSE 100-listed banking group said it would invest \u00a313billion in a range of initiatives aimed at improving its digital services, as part of its new ‘Accelerate 2030’ strategy.\u00a0<\/p>\n
The plans include a new ‘smart wallet’, using the technology it acquired via the takeover of Curve, a mobile app that provides a digital wallet for multiple debt and credit cards.\u00a0<\/p>\n
Lloyds will also develop an in-app transport platform to create a market for vehicle finance, energy, leasing, insurance, mobility and servicing products.\u00a0<\/p>\n
In addition to these plans, Lloyds wants to double the size of its rental home portfolio to 20,000, adding that it would cut the time it takes for customers to complete a home purchase ‘from weeks to days’.\u00a0<\/p>\n
Mortgages, for which Lloyds is a major player and which account for 67 per cent of the total loan book, rose by \u00a31.8billion year-on-year and loans and advances overall by 2 per cent to \u00a3491.5billion.\u00a0<\/p>\n
Meanwhile, deposits increased by 1 per cent to \u00a3500.9billion, driven largely by commercial banking.\u00a0<\/p>\n
Underlying net interest income,\u00a0the difference between what the bank charges borrowers and what it pays savers, grew by 9 per cent to \u00a37.3billion in the first half.\u00a0<\/p>\n
The group’s banking net interest margin, the difference between what the bank earns from loans and pays out on deposits, improved by 15 basis points to 3.19 per cent, helped by structural hedge income and lending growth.\u00a0<\/p>\n
Since 2022, Nunn has overseen significant changes including transforming digital banking and ramping up the use of AI, building up the bank\u2019s wealth arm, and cutting hundreds of high street branches.<\/p>\n
More recently, Lloyds decided to scrap the Halifax brand and change it to Lloyds.<\/p>\n
Nunn 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.<\/p>\n
‘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.<\/p>\n
‘This ensures the group is well placed to launch our new strategy, Accelerate 2030, from a position of strength.’<\/p>\n
The group’s new strategy builds on Nunn\u2019s pivot in 2022 to focus the bank on generating more income from sources that are less closely tied to the interest rate cycle than its traditional lending business.\u00a0<\/p>\n
This shift aimed to make the bank less vulnerable to changes in rates, and has seen Lloyds increase the revenues it makes managing clients\u2019 pensions, investments and insurance.<\/p>\n
Shares in Lloyds rose 1.71 per cent or 1.90p to\u00a0113.25p on Thursday, having risen over 40 per cent in the past year.\u00a0\u00a0<\/p>\n
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