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Lloyds Banking Group has unveiled a higher-than-expected profit for the first half of 2025, as it benefited from a jump in lending and savings balances.

The group, which incorporates Lloyds Bank, Halifax and Bank of Scotland, reported a pre-tax profit of £3.5 billion for the first six months of the year – 5% higher than a year ago,

Earnings for the first half also came in ahead of the £3.2 billion analysts had expected.

Lloyds said total lending to customers increased by £11.9 billion over the period, or 3%, driven by UK mortgages with some 33,000 first-time buyers borrowing on a home.

Customer deposits also grew by £11.2 billion, or 2%, following a strong season for ISAs, while more people moved money out of current accounts and into savings.

Meanwhile, Lloyds confirmed there had been no change to its motor finance provision, having set aside £1.2 billion to cover potential costs and compensation related to commission arrangements.

The group is exposed to the motor finance market through its Black Horse business.

Charlie Nunn, the group’s chief executive, said: “We continue to make great progress in our purpose-driven strategy, building differentiated customer outcomes and delivering growth across our business as we build towards our ambitious targets for 2026.”