Lloyds Banking Group on Wednesday posted a profit in the first half of the year, as loan impairment charges continued to fall and net interest margins improved at the 41% state-owned bank.

Pro-forma pretax profit for the six months to June 30 rose to £1.6bn (€1.9bn) as loan impairments fell to £6.55bn, compared with a £3.96bn loss in the first half of 2009, when loan impairments had soared to £13.4bn. The latest figures strip out Lloyds-HBOS integration costs and some one-time items.