Lloyds Group has done the banking equivalent of thumbing its nose and blowing a raspberry at Barclays this morning, after it posted a set of results suggesting privatisation isn't far off.
The bank's half-year results, for the six months to the end of June, show the bank is back in profit, with profits before tax rising £2.1bn, up from a £450m loss this time last year.
Lending at the bank increased by 1% to £3bn, while lending to small businesses grew by 5%, 'against a net market contraction of 3%', it added.
The Treasury will be happy: not only has it decreased its loan-to-deposit ratio from 114% to 100% (ie it doesn't lend out more than people have deposited), its core tier 1 capital ratio (a measure of how much it holds in assets vs how much it lends) has increased to 9.6% and is expected to hit 10% (in line with EU rules) by the end of the year, 'a year ahead of expectations'.
Chief executive Antonio Horta-Osorio also (rather smugly, given Barclays' little £12.8bn hiccup earlier this week) added that the group expects to meet capital requirements set out by the Prudential Regulation Authority 'without recourse to further equity issuance or the utilisation of additional contingent capital securities'.
Five years ago, Lloyds was begging the government for cash while Barclays looked smugly on. How times have changed. The difference between the two is that Barclays has an investment banking arm (albeit dramatically shrunk down from its BarCap heyday), while Lloyds is essentially a big retail bank. When things are good, investment banks' high margins mean they're incredibly lucrative - although, as we've seen with Barclays, what goes up, must come down. Particularly if it's fiddling the Libor...