Profits are up significantly following a run of losses despite increasing provisions for PPI claims with a further £750m set aside, some £250m over market expectations.
Cost control and reduced bad debts were enough to swing the Bank handsomely back into profit whilst driving up core tier 1 capital.
This is now a simpler more streamlined retail and SME bank with a core focus on service, value and simplicity. It is succeeding, and if it continues on this path it has the capacity to repay more to the taxpayer, lowering the government minority stake.
Expect announcements on giveaways in the autumn statement by the Chancellor. He is too politically astute to miss this opportunity in the run in to the 2015 election. It seems likely the public will be offered discounted shares in addition to swelling the coffers of the Treasury with much needed cash, as Lloyds accelerates its repayment drive.
Hats off to António Horta-Osório, Lloyds CEO. The following chart clearly shows he understands the key maxims of successful retail banking.
Stay focused, control your costs, provide value for money, and look after your customers; if you do they will look after you.