In its half year results Lloyds said underlying profit has risen 32% £3.819bn and it plans to apply to the Prudential Regulatory Authority in the second half of 2014 for permission to restart dividend payments.
The bank said it is benefiting from the UK economic recovery, seeing lending growth and deposit growth.
On the down side Lloyds said it would need to allow an additional £600m to cover PPI claims made against it, taking its total PPI related cost up to £10.4bn.
According to Investec, neither the PPI issue or Lloyds’ role in the LIBOR rigging scandal should be cause for serious concern for investors in its shares. It said the Lloyds share price is driven by the operational performance, and the Q2 2014 results show ‘further solid underlying progress’.
Investec also noted that with Lloyds trading on a multiple of 1.3x it still sees ‘reasonable upside’ in the stock.
