Lloyds TSB first-half profits falls 70%

by Gill Montia

Story link: Lloyds TSB first-half profits falls 70%

Lloyds TSB, the High Street bank that appeared to have been left relatively unscathed by the US sub-prime mortgage crisis, has announced a sharp fall in first-half profit.

In the six months to the end of June profit fell 70% on the same period of 2007, as the bank wrote down £585 million.

The group posted statutory profit of £599 million, down from £1.99 billion a year ago.

In 2007, Lloyds’s credit crunch writedowns totalled £280 million and in May of this year, the group predicted that it had a further £387 million to go.

The larger figure can be attributed to falling share prices and losses related to the US housing market.

While first-half profit was below analysts’ expectations, the bank performed well in terms of profit growth, which stood at 11%, putting aside the writedowns.

Lloyds says it will be lifting its half-year dividend by 2% and that it is confident it will cope well with any slowdown in the UK economy.

At the end of June, the UK’s fifth largest bank sported a core Tier 1 capital ratio of 6.2%.