British bank Lloyds said on Thursday that first-half net profits surged on lower-than-expected credit losses as the economy extended its recovery from the COVID-19 pandemic.

Profit after tax soared to £3.9 billion (€4.6bn) in the six months to June, Lloyds Banking Group (LBG) said in a results statement. That compared with slender net profit of £19 million one year earlier.

LBG released a total of £837 million that had been set aside to cover souring loans during the pandemic. That compared with a vast impairment charge of £3.8 billion last time around linked to the emergency health crisis. 

The group released £837m that had been set aside to cover souring loans during the pandemic. That compared with a vast impairment charge of £3.8bn last time around linked to the emergency health crisis

“During the first six months of 2021, the group has delivered a solid financial performance with continued business momentum, bolstered by an improved macroeconomic outlook for the UK,” said interim chief executive William Chalmers. “While we are seeing clear progress in the vaccine roll-out and emergence from lockdown restrictions, the coronavirus pandemic continues to have a significant impact on the people, businesses and communities of the UK.

The lender was also helped by a booming domestic property market.

Lloyds meanwhile unveiled a £390-million deal to buy savings and pensions firm Embark.

Chalmers is leading the bank until incoming new boss Charlie Nunn takes the helm in August.

Rival Barclays had revealed Wednesday that its first-half net profits jumped to £3.8 billion on the back of the improved economic outlook. 

In England, the bulk of lockdown measures were lifted last week after a phased easing of restrictions. Tougher curbs however remain across the rest of the UK. Nevertheless, the highly-transmissible Delta coronavirus variant is forcing some countries to reimpose restrictions.