After a gap of six years, Lloyds Banking Group (LLOY) has returned to the dividend list. That's testimony to the bank's success at transforming itself since the financial crash into a low-cost, low-risk UK-focused retail and commercial bank. As part of the strategy, the bank has reduced its international presence from 30 countries in 2010 to just six.
Underlying profits, which strip out costs relating to the TSB demerger (£1.5bn) and the payments protection insurance scandal (£2.2bn), increased 26 per cent to £7.8bn. Impairment charges were down 60 per cent to £1.2bn, and costs fell 2 per cent to £9.4bn. Strip out the TSB cost base and the latter figure would have been even lower, at £9bn. The bank has also moved to reduce its reliance on wholesale funding, reducing its loan-to-deposit ratio from 154 per cent in 2010 to 107 per cent last year.