By Sabela Ojea
Lloyds Banking Group PLC on Thursday reported a rise in pretax profit for the second quarter of 2021, beating market expectations, and said that it is buying the investment and retirement platform business Embark Group.
The FTSE 100-listed bank posted a pretax profit of 2.1 billion pounds ($2.92 billion) for the period compared with a loss of GBP676 million for the year-earlier period and a profit of GBP1.29 billion for the same period in 2019.
Lloyds was expected to post a pretax profit of GBP1.23 billion for the period, according to its compiled consensus.
The bank released impairments of GBP333 million amid an economic recovery, up from GBP323 million in the previous quarter.
Net income rose to GBP3.90 billion from GBP3.46 billion for the year-earlier period and GBP4.40 billion for the second quarter of 2019. Net income was anticipated to come in at GBP3.69 billion, taken from the bank's compiled consensus.
The bank ended the period with a common equity Tier 1 ratio--a key measure of balance-sheet strength--of 16.7% and declared an interim dividend of 0.67 pence a share.
The acquisition of Embark Group will entail paying around GBP390 million for the entire share capital of the target company upon completion, Lloyds said, adding that it will receive GBP35 billion of assets under administration on behalf of around 410,000 consumer clients.
The move has led the bank to increase its strategic review 2021 net new money target to around GBP40 billion by 2023, from GBP25 billion previously, in order to reflect its increased growth potential, Lloyds said.
"Embark will also enable the group to re-platform its pensions and retirement proposition, delivering a market-leading platform for intermediaries and significantly strengthening its offering in retirement, an important growth market," it said.
Write to Sabela Ojea at email@example.com; @sabelaojeaguix
(END) Dow Jones Newswires