Lloyds Banking Group (LLOY.L) reported a sharp rise in first-half profits on Thursday, as chief executive Charlie Nunn unveiled an ambitious new four-year strategy built around artificial intelligence and digital transformation.
Pre-tax profit reached £4.3 billion for the six months ending June 30, a 23% increase compared to the same period last year, surpassing analyst expectations of £4.1 billion.
The strong performance was driven by increased income and more disciplined cost management, with customer lending and deposits both growing over the period.
Nunn also confirmed the bank remains on track to deliver more than £2 billion in gross cost savings between 2022 and 2026, and is now targeting a further £2 billion by 2030.
The new plan, dubbed Accelerate 2030, will come into effect from 2027 when the current five-year strategy concludes, and involves investing more than £13 billion over the four-year period.
Lloyds intends to achieve its fresh savings target by continuing its digital transformation, modernising core technology, and deploying artificial intelligence more deeply across its operations.
Nunn said he sees particular promise in so-called agentic AI, which he believes can unlock services the bank has never previously been able to offer customers at scale.
“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,” Nunn said.
He pointed to the potential for AI-powered investment advice as one such example, saying the technology could allow the bank to reach any customer in the UK who wants guidance through well-trained agents.
The strategy also introduced a new consumer product called the Lloyds Smart Wallet, unveiled Thursday, designed to provide customers with new payment options and rewards.
The deepening reliance on generative AI, which Lloyds previously said was expected to deliver a £100 million boost this year through revenue gains and cost savings, has raised concerns about potential job losses across the group.
Nunn acknowledged the shift would affect the workforce but said the bank does “not put targets around numbers of staff” as it navigates the transition.
“It is going to impact work, it is going to require us to continue to reskill people and hire new people,” Nunn said, adding that the dynamic has defined his “30-odd years in financial services.”
Since taking the helm in 2022, Nunn has overseen substantial changes at the bank, including a major push into digital banking, expansion of its wealth management arm, and the closure of hundreds of high street branches.
The group also recently decided to scrap the Halifax brand and bring it under the Lloyds name, a move that further consolidates its retail banking identity.
“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,” Nunn said in a statement Thursday.
