Lloyds returns to the black with £2.1bn profit State-backed lender Lloyds Banking Group has swung out of the red for the first six months of the year, despite taking a further £500 million charge to compensate customers who were mis-sold payment protection insurance. The group, which is 39 per cent owned by the taxpayer, said the improvement in its balance sheet meant it would seek talks with regulators during the second half of the year to discuss the "timetable and conditions" for the resumption of dividend payments to shareholders. It also continues to target a flotation for its "Project Verde" business by the middle of next year, following the collapse of a £750m deal to sell more than 600 branches to the Co-operative. Lloyds was ordered to sell the branches to meet European Union rules on state aid following its £17bn state bailout in 2008, but will now rebrand the business under the TSB banner as it puts the finishing touches to the flotation plans. For the six months to 30 June, Lloyds reported a statutory pre-tax profit of £2.1 billion, compared with a £456m loss for the same period last year, as total underlying income edged up 2 per cent to £9.5bn. The marked improvement was also driven by a decrease in costs and a 43 per cent plunge in bad debts to £1.8bn. Chief executive Antonio Horta-Osorio said: "We have made substantial progress on the delivery of our strategic plan, and have significantly improved the group's performance, balance sheet strength and resilience while continuing to deal with legacy issues. While the UK economy remains subdued and we await further clarification on the detail of regulatory implementation, including on capital and ringfencing, we expect to deliver further progress in the remainder of 2013 and beyond. Although the lender said the flow of new PPI complaints was slowing, costs associated with the mis-selling claims were higher than expected, leading it to book a further £500m charge. This takes the group's total PPI provisions to almost £7.3bn. Lloyds also announced today that its Halifax brand would be returning to high streets in Scotland for the first time since the former building society merged with Bank of Scotland in 2001. The first Halifax branch is due to open on Aberdeen's Union Street by the end of this year. Further sites will open in Edinburgh and Glasgow by the middle of 2014.