Lloyds TSB posts profit of £3.92bn

by Gill Montia

Story link: Lloyds TSB posts profit of £3.92bn

Lloyds TSB posted profit of £3.92 billion in 2007, representing a 6% rise on 2006.

The group surprised the market by reporting a mere £280 million loss in relation to its investments affected by the US sub-prime mortgage crisis.

The bank had previously estimated its writedown to be in the region of £201 milliion but an additional £80 million emerged because of a fall in the value of the trading portfolio held by its corporate markets unit.

The total figures compare with the £1.6 billion written down by Barclays last year, as a result of the credit crisis.

However, Lloyds has cautioned that the industry is facing a turbulent 2008 because of slowing global economic growth.

Profit at the bank’s UK retail business rose 17% in 2007, to £1.81 billion. Over one million new current accounts were opened and growth in income well exceeded rises in operating costs.

Lloyd’s wholesale and international banking division recorded a 12% fall in profit to £1.44 billion, as a result of sub-prime losses.

The bank is raising its final dividend by 5%, increasing its full-year payout to 35.9p, a 5% rise on 2006.