Lloyds Banking Group said on Thursday it would invest more than £13 billion in digital services, including a new smart wallet, as it reported statutory profit before tax up 23 per cent to £4.3 billion for the first half of 2026.

The FTSE 100 lender set out the plan, which it has named Accelerate 2030, alongside its half-year results. Lloyds said the business plan would make “money simpler, safer and more connected” for its 28 million customers.

Net interest income, the difference between what the bank charged borrowers and what it paid savers, rose 9 per cent to £7.3 billion, lifting total net income by 9 per cent to £9.7 billion. The bank attributed the profit improvement to higher overall revenues and cost-cutting, and pared back its allowance for expected loan losses slightly to £3.3 billion. The profit figure was ahead of expectations.

Charlie Nunn, the chief executive, said: “In the first half of 2026, we delivered sustained strength in financial performance, with continued income growth, improving operating leverage, strong credit performance, growing capital generation and increasing shareholder returns.”

The bank, the biggest lender to consumers in the UK, said it would increase its interim dividend by 30 per cent to 1.58p per share and start a £1 billion share buyback programme. Barclays, which reported second-quarter profit before tax up 31 per cent to £3.3 billion on Tuesday, also launched a £1 billion buyback.

Lloyds said it would double the size of its relationship team arranging loans for small businesses and deliver new loans of more than £45 billion. The pledge follows a government-backed taskforce convened in February to unlock £1 billion of additional lending for small firms, which cited British Business Bank figures putting loan rejection rates at high street banks at around 40 per cent.

The smart wallet will use technology Lloyds acquired through its takeover of Curve, a mobile app that provides a digital wallet for multiple debit and credit cards. Lloyds bought Curve in November last year for £120 million in a deal the bank said would give customers “expanded payment flexibility”.

The app allows customers to switch payments to different cards after making a purchase, to save on any credit fees incurred accidentally, and has rule-setting capabilities helping ensure certain types of transactions are only issued through certain channels.

The bank said it would also develop an in-app transport platform to create a market for vehicle finance, leasing, insurance, energy, mobility and servicing products.

Lloyds said it would deliver gross cost savings of about £2 billion by deploying technology to automate processes and improve the productivity of its workforce. In its own account of the half-year performance, the group said it had around 22 million mobile app users who log on around seven billion times a year, and that it had made around £30 billion of new finance available to small business customers since 2023.

On housing, the bank said it was set to double the size of its portfolio of rental homes to 20,000 and would cut the time it took customers to complete a home purchase “from weeks to days”.

The strategy follows a series of decisions to consolidate the group’s retail operations. Lloyds said earlier in July that the Halifax brand would change to Lloyds in England, Wales and Northern Ireland, making Lloyds its single consumer banking brand in those markets, after reports in May that the 173-year-old name was to be retired. The group has also confirmed the closure of 95 further branches between May this year and March 2027, which will leave it with 610 sites.

Nunn and William Chalmers, the chief financial officer, presented the results and the updated strategy to investors at 9.30am on Thursday. Lloyds said Accelerate 2030 covers the period from 2027 to 2030 and is built around what it described as reimagined customer experiences, increased group connectivity and a productivity step-change.