# Lloyds targets another £2bn cost-cutting as half-year profit jumps by 23%

By Matt Britzman — 2026-07-30

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “This looks like another confident step forward from Lloyds. The headline income number was broadly as expected, but the quality underneath was better, with other income ahead, tight cost control and underlying profit before impairments beating forecasts.

“Net interest income kept moving higher as the structural hedge and loan growth continued to outweigh pressure on lending margins. Impairments were a little heavier than expected, though credit performance remains healthy, while a 30 per cent dividend increase helped offset a slightly smaller-than-forecast buyback.

“The new 2030 targets add weight to the longer-term story. Lloyds is aiming for returns on tangible equity of around 20 per cent, supported by steady income growth, a cost-to-income ratio below 45 per cent and a broader mix of earnings from areas like insurance, wealth and transport.

“Those ambitions look credible given the momentum already coming through, and there may be some conservatism in the outlook for interest income, leaving room for upgrades down the line. That fits our view that Lloyds remains one of the stronger names in the sector, with a solid capital position and good scope for shareholder returns. The valuation is no longer the bargain it once was, but today’s update suggests the business still has room to deliver.”

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