Lloyds TSB expects "strong" trading performance

24-08-2006

Lloyds TSB has said that it expects to deliver a "strong" trading performance in the first half of the year.

In a trading update ahead of first half-results for the period ending June 30th, Britain's fifth-largest bank confirmed that it expected to report "satisfactory earnings growth" after reducing its costs and increasing borrowing to UK companies.

The bank said that its retail business continued to make progress and that steps taken to improve performance had resulted in sales volumes through its branch network and telephone and banking facilities being "well ahead" of those recorded for the same period last year.

Good growth in savings and investment products had also partly offset the expected slowdown in unsecured consumer lending and related insurance products, Lloyds added.

The company said that its strategy to enhance its relationship with its corporate and small business customers had also generated good levels of income growth.

Meanwhile, the group's programme of efficiency improvement initiatives are on track to deliver net benefits of around £30 million in 2006.

Lloyds also said that it expected net investment to amount to around £20 million for the first six months of the year as a result of moves to streamline the company's IT division and consolidate its back office operations.

The group added that it had agreed to fund a £1.5 billion deficit in the company's pension scheme over the next ten years.

Lloyds TSB group chief executive Eric Daniels said: "We are delivering against our financial goals while investing in the long-term growth of our business franchises."

"We expect that the result of building better businesses will be sustained economic profit growth."

"The group remains on track to deliver a satisfactory performance for the first half of 2006," he added.


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