Lloyds TSB profit slump of 70 percent
Jul 30, 2008 | Comments 0
Today’s loss brings the group’s total credit crunch impact to £972m, this may seem an awful lot of money to most, but it’s a fraction of the write downs many of the banks rivals have had. The group said that the performance was knocked by the drop in its Scottish Widows business, and the value of investments, the volatility in the stock market impact the group.
Lloyds have hinted that they are not planning a multi-billion pound fundraising move. Like the banking counterparts Barclays, HBOS and Royal Bank of Scotland.
Eric Daniels the chief executive the group said the bank’s capital position was ‘very robust’ and should help the group weathers the market and economic turbulence. Lloyds said its underlying performance reflected good ‘momentum’, with adjusted profits up 11% to £2.16bn, they will also lift its half-year dividend by 2% and said it was confident in its capital strength.
Lloyds posted a 15% rise in underlying profits at its retail banking arm, to £911m. The group grew customer deposits by 10% over the last twelve months, but due to the mortgage lending slowdown it’s continuing to see a cut its mortgage book.
New UK mortgage lending was expected to total around £60bn in 2008, down from £108bn last year, both net figures.
Lloyds announced that they have £655m in bad debt in its UK retail operation which is slightly higher; there is also a 3% increase of mortgage accounts three months or more in arrears over the last year.
The group expect house prices to fall a further 10% to 15% this year and 5% in 2009, and with the £36m impairment charges they have already this could lead to further bad debt.
Lloyds appreciate that is has been a challenging period for all banks, but with a more conservative business model they will withstand the difficulties of the global financial market.
Filed Under: Business News