Lloyds Banking Group on Wednesday posted a £1.6bn underlying first-half profit after a marked easing of the loan losses that had ravaged its financial performance in 2009. However, the partly state-owned group said that net lending to businesses – a politically sensitive subject – was broadly flat because corporate customers were being cautious about investing or expanding their inventories. Ricahrd Stovin-Bradford analyses the state-owned bank’s return to profit.