Lloyds TSB says H1 on track

LONDON (Reuters) - Lloyds TSB said it was on track to deliver a good performance in the first half, excluding a writedown of 387 million pounds on the value of assets tarnished by the credit crunch.

Lloyds, the country's fifth biggest bank, said in a trading update on Tuesday that its pretax profits rose by more than 10 percent in the first quarter, excluding the writedown and the adverse impact of volatility on its insurance unit.

The bank's 387 million-pound writedown for the quarter is a result of the global credit crunch, and adds to a 280 million pound writedown on assets last year, but it is far less than writedowns reported by most rivals.

Most of the latest loss reflects a 278 million pound cut in the value of the bank's trading portfolio. At the end of March the portfolio contained 200 million pounds of indirect exposure to U.S. subprime mortgages and asset-backed securities collateralised debt obligations (CDOs).

The bank said it would also make a 740 million pound adjustment to its reserves to reflect a drop in the valuation of assets it expects to hold until maturity.

Lloyds said its core banking businesses had maintained the growth momentum shown last year. It said underlying revenue growth had been well ahead of cost growth and it "significantly improved" its market share of net new mortgage lending.

But it said the overall performance of its wholesale and international banking arm had been hit by the turmoil in financial markets.

(Reporting by Steve Slater and Clara Ferreira-Marques; Editing by Quentin Bryar)

• Email Story
• IM Story
• Printable View
• Blog This

Recommend this article

Sponsored Links

(What’s this?)