Our overall cost income ratio improved from 64% to 61%. We've announced a dividend for the second quarter of 1p, bringing the dividend for the first half to 2p.
I'd like to move now to the performance of the individual businesses. In the U.K. Retail and Business Banking, profits grew 6% to GBP 746 million, largely as a result of improved impairment in personal unsecured lending. Total income decreased 2% to GBP 2.2 billion, mainly as a result of lower net fees and commissions. Margins have reduced slightly as expected, reflecting a lower benefit from the structural hedges. Net interest income remained broadly stable as a result of higher volume. Impairment charges reduced by 56% to GBP 122 million, and the annualized loan loss rate was 19 basis points compared to 46 basis points in 2011. Operating expenses increased 5% to GBP 1.3 billion, including costs related to processing PPI claims. Return on equity grew to 16.6%. Customer deposits have grown 2% to GBP 114 billion since the year end. Our total loans and advantage grew 2% to GBP 123 billion, driven by growth in mortgage balances with net new mortgage lending of GBP 2.2 billion.
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