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| Sharp profit fall for Lloyds TSB | Sharp profit fall for Lloyds TSB |
| (10 minutes later) | |
| Lloyds TSB has suffered a sharp drop in profits in the first six months of the year after a fall in the value of its stock market-related assets. | Lloyds TSB has suffered a sharp drop in profits in the first six months of the year after a fall in the value of its stock market-related assets. |
| Profit before tax was 70% lower at £599m ($1.18bn), compared with a profit of £1.99bn in first half of 2007. | Profit before tax was 70% lower at £599m ($1.18bn), compared with a profit of £1.99bn in first half of 2007. |
| Excluding the impact of financial turmoil on its investments, Lloyds TSB said its businesses, especially retail banking, had performed well. | Excluding the impact of financial turmoil on its investments, Lloyds TSB said its businesses, especially retail banking, had performed well. |
| It increased its shareholder dividend by 2% to 11.4 pence per share. | It increased its shareholder dividend by 2% to 11.4 pence per share. |
| "The first half of 2008 has been a period of considerable turbulence for the financial services sector," said chairman Sir Victor Blank. | "The first half of 2008 has been a period of considerable turbulence for the financial services sector," said chairman Sir Victor Blank. |
| A fall of 70% or almost £1.4bn in its pre tax profits for the first half of the year is something of a shock Robert Peston, BBC Business Editor Read Robert's blog in full | |
| Speaking to reporters, the company asserted that, unlike other banks, it had no investments related directly to the US sub-prime mortgage market whose value has collapsed. | Speaking to reporters, the company asserted that, unlike other banks, it had no investments related directly to the US sub-prime mortgage market whose value has collapsed. |
| It also pointed out that excluding the impact of market volatility, its profit before tax had risen by 11% to £2.16bn. | |
| However, BBC business editor Robert Peston warned that the 70% fall in profits was a worrying possible augury of the problems other UK banks may disclose as they report their results. | |
| Housing slowdown | |
| Looking to the future, Lloyds TSB said it expected the slowing growth of the UK economy to hit its business. | Looking to the future, Lloyds TSB said it expected the slowing growth of the UK economy to hit its business. |
| The group said it had won almost of quarter of all new lending in the mortgage market in the first six months of the year. It also opened half a million new current accounts. | |
| However, Lloyds said it expected house prices to fall by up to 15% this year. Were prices to fall by 12.5%, it said by way of an example, this would wipe £100m off the value of its mortgage loans. |