Lloyds shares up but FTSE falters

Lloyds TSB shares rose 4% today after the smallest of the “big-five” banks revealed in-line pre-tax profits of £3.9 billion for 2007.

The 6% improvement on an underlying basis was accompanied by a 5% dividend hike as Lloyds directors sought to reassure investors about the company’s exposure to the credit crunch.

Lloyds shares were 18.25p higher at 455p, although the wider market fared less well as the FTSE 100 Index stood 16.1 points lower at 5916.1 by mid-morning.

Royal Bank of Scotland followed Lloyds higher, with shares up 7p to 381p ahead of results from the bank next week. Alliance & Leicester also showed signs of life – up 5.5p at 485p – after its shares received a battering earlier this week in the wake of funding concerns.

Retailers featured on the fallers board after John Lewis said sales fell 3.4% in the week to February 16. Marks & Spencer was down 11p to 406.5p, while Next was off 49p at 1308p.

Accountancy software company Sage led the fallers board after analysts used results from US competitor Intuit last night as a guide for Sage’s own performance. Shares were 4% lower, or 9.5p down at 207.75p.

Taylor Wimpey followed with a drop of 6.7p to 162.3p, as investors prepared for a disappointing round of results in the housebuilding sector.

In the FTSE 250 Index, Biffa shares were buoyed by speculation that private equity firm Terra Firma and French industrial group Suez will join forces to table a counter offer for the waste management business.

Shares were 4.75p higher at 369.75p, well above the 350p offer price recently agreed by Biffa’s management with private equity firm Montagu Funds.

Elsewhere, pubs chain JD Wetherspoon slipped 16.5p to 310.75p, a drop of 5% following a broker downgrade.