Lloyds Banking Group (LSE: LLOY) has unveiled a sweeping four-year strategy centered on slashing approximately £2 billion in gross costs by 2030 while pursuing steady income growth and higher returns.
The programme, titled Accelerate 2030, is built around three pillars: growing its business, innovating its product offerings, and simplifying its operations across the board.
Lloyds confirmed it is on track to achieve more than £2 billion in gross cost savings between 2022 and 2026, with the new target representing a continuation of that aggressive efficiency drive.
The bank intends to achieve the fresh round of savings primarily through ongoing digital transformation, modernisation of its technology infrastructure, and the broad deployment of artificial intelligence across its operations.
For the 2027 to 2030 period, Lloyds is targeting mid-single-digit compound annual income growth, a cost-to-income ratio below 45% by 2030, return on tangible equity of approximately 20% in 2030, and capital generation above 225 basis points.
In its business and commercial banking division, the group plans to double the size of its relationship team and embed more services into third-party systems used by small and medium-sized enterprise customers.
Lloyds also intends to introduce an innovation banking offer aimed at fast-growing companies, while rolling out AI-supported tools for relationship managers to improve efficiency and balance sheet turnover.
The bank has set out several additional long-term targets, including £40 billion in lending for first-time buyers, more than £45 billion in new funding for small business customers, and more than £100 billion in sustainable and transition finance.
Lloyds reported statutory profit after tax of £3.1 billion in the first half of 2026, a rise of 23% from a year earlier, with net income totalling £9.7 billion, of which £7.3 billion came from net interest income.
Costs remained broadly flat year-on-year at £4.9 billion, as the bank cited its near £2 billion in accumulated cost savings and lower severance costs as helping to offset business growth spending and inflationary pressures.
Alongside the strategy announcement, Lloyds unveiled a new £1 billion share buyback programme and hiked its interim dividend by 30% to 1.58 pence per share, representing approximately £920 million in shareholder returns.
Earlier this year, Lloyds confirmed that the Halifax brand will be replaced by the Lloyds name in England, Wales, and Northern Ireland, leaving Lloyds as its sole consumer banking brand across those markets.
CEO Charlie Nunn pointed to artificial intelligence as a central driver of the new strategy, saying: “We do think that there are new opportunities with agentic AI to both differentiate our services and grow more efficiently, i.e. provide services we’ve never been able to provide.”
Nunn described the group as entering this new phase from a position of strength, stating: “We are successfully completing our 2022 to 2026 strategy, focusing on customer experience, pivoting the group to growth and laying the foundations for our exciting new strategy.”
He added: “We have strengthened our market leadership, built our digital and AI capabilities, and enhanced our cost and capital leadership, while remaining on track to deliver our 2026 financial targets.”
