Lloyds Banking Group’s push to spend heavily on AI sparks job fears despite booming profits

LLOYDS Banking Group is sharpening the axe again, as booming profits give Britain’s biggest mortgage lender room to spend heavily on AI. The bank made £4.3billion before tax in the first half of 2026, up 23 per cent from a year earlier and comfortably ahead of the £4.1billion City analysts had expected. Higher income, tighter control of costs and growth in customer loans and deposits helped lift the result. Now chief executive Charlie Nunn has unveiled Accelerate 2030, a four-year strategy starting in 2027. Sign up for the Money newsletter Thank you! Lloyds will invest more than £13billion while seeking another £2billion of gross savings by 2030. It is already on course to cut more than £2billion between 2022 and 2026. AI will sit at the heart of the overhaul. Lloyds hopes that smarter digital tools will offer customers more personalised help, including investment guidance, while allowing staff to work faster behind the scenes. But the push has fuelled fears of further job losses after years of branch closures. Mr Nunn refused to set staffing targets, but admitted the technology would “impact” work. He said employees would need retraining and the group would also recruit people with new skills. Most read in Money The plan also includes a Lloyds Smart Wallet, designed to give customers new ways to pay and earn rewards. Generative AI is expected to deliver a £100million boost this year through extra revenue and lower costs. Mr Nunn said Lloyds was entering the strategy “from a position of strength” after expanding digital banking and wealth services. DEFENCE GIANTS’ BOOM BAE Systems and Rolls-Royce are cashing in on a global defence spending boom, with both raising their profit forecasts after strong half-year results. Rolls-Royce shares leapt 6 per cent after the engine-maker predicted underlying operating profit of between £4.7billion and £4.9billion this year, up from £4billion to £4.2billion. BAE also upgraded its outlook, forecasting a 10 to 12 per cent rise in annual underlying earnings. Half-year earnings increased 11 per cent and pre-tax profit reached £1.28billion. BAT ON A ROLL BRITISH American Tobacco has raised its annual earnings forecast as booming demand for Velo nicotine pouches and strong US sales offset weakness in Asia. The Lucky Strike and Dunhill maker expects earnings per share growth near the middle of its 5 to 8 per cent target range, improving on earlier guidance. Half-year adjusted earnings, forecast to be 158.5p per share, rose 7.9 per cent to 164p. SHELL SURGES SHELL cashed in on wild oil price swings caused by the Iran War to post half-year earnings of £12.6billion, a 70 per cent jump. Second-quarter profit more than doubled to £7.4billion after Shell’s traders benefited from Brent crude’s bouncing barrel costs. The windfall offset a 31 per cent fall in gas production after an Iranian attack shut the Pearl plant in Qatar. Boss Wael Sawan hailed Shell’s resilience amid “severe disruption”. Comment now