Lloyds Banking Group has announced a return to profit for the six months to the end of June.
The UK-based bank, which is 39 per cent owned by the government, recorded a £2.1 billion ($3.2 billion) profit compared to the £456 million loss it made in the same period of 2012.
It said significant progress had been made on strengthening its balance sheet, but more must be done.
Lending increased by one per cent to £3 billion, in the first half of the year.
The institution is moving towards becoming a private company again, with the government looking to sell off its £19 billion stake. To move the process forwards the company will meet with regulators about resuming paying a dividend on its shares.
However, Lloyds also confirmed a further £450 million will be put aside to cover compensation for mis-selling of payment protection insurance, which takes the total bill to £7.3 billion.
By Gary Cooper