Lloyds share price to close up 3 pct on FTSE 100 after bumper return to profits

Lloyds share price is to close up after a bumper return to profits lifted its share price above 74p.

The Banking Group which has risen 44 pct in a month are well-ahead of the £800 million expected for first half, and reported pre-tax profit twice that at £1.6 billion.

Total revenue meanwhile was reported as rising five per cent to just under £12.5 billion.

Eric Daniels, Chief Executive Officer of Lloyds Banking Group, said, "I am delighted to announce our first half results which demonstrate the strength of the Group's core businesses."

"The principal element of the Group's strategy remains the focus on building deep, long-lasting customer relationships in all its franchises." paying note to HBOS which enjoyed its first profits as part of the Lloyds Banking Group since being merged.

Bruce Packard, Financial analyst at Seymour Pierce stockbrokers however was less impressed: "LLOY management is to be congratulated for reporting PBT well ahead of expectations. Yet, this is profit in an accounting sense, rather than an economic sense, given the £132bn of Government support the Group is still receiving and the billions of wholesale funding with maturity of less than one year maturity. As a stock broker it is pleasing to see customer deposits leaving the banking system to go into equity markets, as a banks analyst it makes us nervous. Our recommendation is Sell."

Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "Lloyds has made its own contribution to the generally positive global banking story so far.

"In particular, the level of impairments propelled the group into the black, following a significant drop from the previous year...Whilst the government stake continues to overhang the shares, there is nonetheless a theoretical paper profit after the price has exceeded the quoted breakeven price of 63p.

"Even though the general market consensus remains that there is better value to be found elsewhere in the sector, the overall market view for the shares is a strong hold." he added.