Lloyds TSB profits rise 7%

UK banking group Lloyds TSB today posted a 7% rise in half-year profits and said its retail division was continuing to attract new business.

Lloyds said pre-tax profits in the half year to June 30 lifted to £1.68bn (€2.4bn) from £1.57bn (€2.3bn) a year ago.

The bank said it had seen a strong increase in its retail bank’s recruitment of “quality customers” and good levels of customer balance growth in many product areas.

In June, it reported a rise in the level of high street customers in repayment difficulties and a consequently greater provision than a year earlier to cover it, but said a lower provision in its corporate lending operations had offset this.

Customer lending during the half was up by 4% to £167.6bn (€242.5bn) and customer deposits rose by 3% to £130.6bn (€189bn).

The group said it had seen a substantial increase in sales and market share in life assurance.

It had also made good progress in building an integrated wholesale bank, with a 25% increase in corporate markets pre-tax profits and a 27% lift in business banking profits.

Costs remained firmly under control and income growth exceeded cost growth in each of the bank’s divisions and at group level.

Chief executive Eric Daniels said Lloyds’ capital position remained robust and its asset quality was satisfactory.

“We are well positioned to deliver a good trading performance in the second half of 2005 and beyond,” he said.

Lloyds, which owns the Scottish Widows and Cheltenham & Gloucester brands, has around 15 million personal customers and more than 2,000 branches.

It said Scottish Widows remained strongly capitalised and was expected to return further significant capital to the group in the second half in addition to a £200m (€289.4m) dividend paid in March.

The company announced a 20% fall in annual pre-tax profits to £3.5bn (€5bn) in March this year, although the decline reflected the impact of businesses sold in 2003, which contributed nearly £1.2bn (€1.7bn) to the bottom line a year earlier.