Lloyds Raises Bad Debts and Steers Shares Lower

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Summary:

  • Lloyds banking group reports a 10% increase in underlying profit, reaching just over 4 billion for the first half of the year.
  • Impairment charge of 700 million pounds reflects delinquencies and bad debts on the company's books.
  • Loans and advances to customers decline by approximately 10% to 450 billion, while customer deposits drop by about 1.2% to 469 billion.
  • Lloyds announces a 15% increase in interim dividends, remaining ahead of its target.
  • Despite positive announcements, Lloyds' shares still decline by 3.8% in response to the first-half figures.

Lloyds banking group faces disappointment as shares drop due to the latest first-half numbers. Despite an increase in underlying profit, several factors are contributing to the decline in stock price.


The banking group's statutory profits after tax reached 2.9 billion, with underlying profit just over 4 billion, showing a 10% increase compared to the previous year's 3.6 billion. However, the stock price is being weighed down by a significant impairment charge of 700 million pounds, reflecting delinquencies and bad debts on the company's books.

Additionally, Lloyds' loans and advances to customers have dropped by approximately 10% to 450 billion, while customer deposits saw a decline of about 1.2% to 469 billion. It seems that some individuals are opting to utilize their savings in response to the soaring inflation, which raises the costs of other expenses.

Despite these challenges, Lloyds announced a 15% increase in interim dividends, and the company claims to remain ahead of its target. However, this positive news did not prevent the stock from declining by 3.8%, though it has recovered slightly from its lowest point, currently trading at 44.2 pence.

The banking group is facing pressure as it releases its first-half figures, impacting investor confidence in the company's performance.


Investors and financial analysts will closely monitor Lloyds' actions and strategies to address the bad debt situation and enhance its overall financial stability.

Location: London, UK

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