(FT) -- Lloyds Banking Group on Wednesday posted a £1.6bn ($2.5bn) underlying first-half profit after a marked easing of the loan losses that had ravaged its financial performance in 2009.
However, the partly state-owned group said that net lending to businesses -- a politically sensitive subject -- was broadly flat because corporate customers were being cautious about investing or expanding their inventories.
Eric Daniels, chief executive, said: "We are seeing very little demand out there ... so it is not a question of us being mean and turning customers away".
The £1.603bn profit figure, which compares with a £3.957bn ($6.3bn) loss in the first half of 2009, is on an underlying "combined businesses" basis, a Lloyds-devised measure that contains several adjustments, including tweaks related to its 2009 purchase of HBOS.
Statutory pre-tax profit was £1.296bn ($2bn), compared with a £5.95bn ($9.5bn) profit in the first half of 2009 -- a figure that was distorted by artificial accounting gains on the HBOS deal. Marc Smart, an analyst at Citi, said profit was ahead of market expectations.
The Lloyds results came in the wake of the strong profit growth announced by HSBC on Monday, as well as Tuesday's return to profit at the "bad bank" spun out of the old Northern Rock business. CNN
