In 2020, the bank posted a first-half loss of £602 million, after allocating £2.4bn for bad loans.

Lloyds also announced a 2% rise in net income reaching £7.6bn, with increased average interest-earning assets at £441bn, a strong banking net interest margin of 2.5% and other income of £2.4bn, alongside a reduction in operating lease depreciation.

The bank posted a net impairment credit of £656m, including £333m in the second quarter, as a result of an £837m release driven by improvements to the macroeconomic outlook for the UK, combined with robust credit performance.

Lloyds Banking Group’s loans and advances stood at £447.7bn, up £7.5bn in the period, which the bank said was driven by strong growth of £12.6bn in the open mortgage book.

Customer deposits reached £474.4bn, up £23.7bn in the first half of the year, with continued inflows into the Group’s trusted brands, including Retail current accounts which were up £9.9bn in the six months to the end of June. This resulted in a loan to deposit ratio of 94%, which continues to provide a strong liquidity position and significant potential to lend into recovery.

Lloyds also announced a 0.67 pence interim dividend.

William Chalmers, interim group chief executive, said that during the first six months of the year, the group had “delivered a solid financial performance”.

However he added: “While we are seeing clear progress in the vaccine roll out and emergence from lockdown restrictions, the coronavirus pandemic continues to have a significant impact on the people, businesses and communities of the UK. In this context, the Group remains committed to Helping Britain Recover from the pandemic and delivering for all stakeholders.”

The bank is the latest UK lender to announce its half-year results. Yesterday, Barclays announced a profit before tax of £5bn, compared to the £1.3bn reported in 2020.

Earlier this week, Scottish Financial News reported that Virgin Money, owner of Glasgow-based Clydesdale Bank, saw its underlying profit more than double year-on-year to £245m.