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Lloyds TSB's 2007 profits fall 6% Lloyds TSB's 2007 profits fall 6%
(20 minutes later)
High Street bank Lloyds TSB has posted a 6% fall in annual profits, but raised its dividend to shareholders.High Street bank Lloyds TSB has posted a 6% fall in annual profits, but raised its dividend to shareholders.
Pre-tax profits were £4bn in 2007, down from £4.25bn the year before. The dividend is up 5% to 35.9p per share.Pre-tax profits were £4bn in 2007, down from £4.25bn the year before. The dividend is up 5% to 35.9p per share.
Profits taking into account of one-off items including the sale of certain business units, such as Abbey Life, were up 6% to £3.9bn.Profits taking into account of one-off items including the sale of certain business units, such as Abbey Life, were up 6% to £3.9bn.
Lloyds TSB reported losses on investments of £280m due to the global credit markets turmoil.Lloyds TSB reported losses on investments of £280m due to the global credit markets turmoil.
It has raised that figure from December 2007, when it said write-downs would be £200m.
'Lower risk''Lower risk'
"Our higher quality, lower risk, business model has been clearly demonstrated in the resilience of our earnings stream," said chairman Sir Victor Blank. Lloyds TSB said it had limited exposure to investments affected by the tightening in credit conditions.
In 2007, one million new customers opened accounts with the bank. It is the UK's largest provider of current accounts and personal loans. "Our lower risk strategy limited the impact of the abrupt change in the markets," chief executive Eric Daniels said.
"Consequently, our charge was relatively modest in comparison to our balance sheet size, our earnings and the charges taken by many other organisations."
Earlier this week, fellow banking group Barclays announced a write-down of £1.6bn on investments due to turbulence in global markets.
Outlook 'uncertain'
The level of arrears on mortgages and loans fell compared with 2006 and Lloyds TSB reduced the amount it had set aside to cover bad debt.The level of arrears on mortgages and loans fell compared with 2006 and Lloyds TSB reduced the amount it had set aside to cover bad debt.
"Whilst the economic outlook for 2008 is uncertain," the company said, it does not expect to have to increase its provision for bad debt this year."Whilst the economic outlook for 2008 is uncertain," the company said, it does not expect to have to increase its provision for bad debt this year.
Earlier this week, Alliance & Leicester reported a 30% drop in annual profits. Profits at the General Insurance business fell 47%, largely due to an increase in bad weather related claims of £113 million.
Fellow banking group Barclays said its 2007 profits had fallen 1% and announced a write-down of £1.6bn on investments due to turbulence in global markets. In 2007, one million new customers opened accounts with the bank. It is the UK's largest provider of current accounts and personal loans.
Lloyds TSB shares rose in early trading, up 8.5p to 436.75p.