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Lloyds TSB's 2007 profits fall 6% Lloyds TSB's 2007 profits fall 6%
(about 1 hour 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, and increased the value of investments written off because of market turmoil.
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 in 2006. Write-downs increased to £280m from £200m.
Lloyds TSB increased the value of investments it has written off because of the global credit markets turmoil to £280m from £200m. However, when the sale of businesses including Abbey Life is included, and market volatility taken into account, profits rose 6%.
Earlier this week, Barclays announced a write-down of £1.6bn on investments, due to turbulence in global markets. Lloyds TSB also increased its shareholder dividend by 5% to 35.9p.
'Lower risk''Lower risk'
Lloyds TSB said it had limited exposure to investments affected by the tightening in credit conditions.Lloyds TSB said it had limited exposure to investments affected by the tightening in credit conditions.
"Our lower risk strategy limited the impact of the abrupt change in the markets," chief executive Eric Daniels said."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.""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, Barclays announced a write-down of £1.6bn on investments, due to turbulence in global markets.
Outlook 'uncertain'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 did not expect to have to increase its provision for bad debt this year.
Profits at the General Insurance business fell 47%, largely due to an increase in bad weather related claims of £113 million. Profits at the General Insurance business fell 47%, largely due to an increase in bad weather-related claims of £113 million.
In 2007, one million new customers opened accounts with the bank. It is the UK's largest provider of current accounts and personal loans.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. Lloyds TSB shares were up 3.8% at 453.5 pence.