UK's Big Banks Report Higher Half-Year Profits and Extend Buybacks

The UK's biggest banks delivered a run of stronger first-half results, helped by a higher-for-longer interest rate environment that has supported the margins they earn on lending. Lloyds Banking Group reported statutory pre-tax profit of about 4.3 billion pounds, up from 3.5 billion pounds a year earlier, with a banking net interest margin of 3.19% and progress on a multi-billion-pound share buyback. Rivals also updated the market during the reporting season, with Barclays and NatWest among those expected to show higher profits, and several lenders extending capital returns to shareholders through buybacks and dividends. Analysts noted that expectations for interest rates have swung sharply, with earlier hopes of cuts giving way to the prospect of increases after the inflation scare triggered by the US-Iran conflict, a shift that has helped bank revenues even as it squeezes borrowers. Still, some executives and analysts cautioned that the same economic backdrop, including higher energy costs and cost-of-living pressure, could push up impairment charges for bad loans in the quarters ahead, tempering the otherwise upbeat tone.