Credit spree boosts revamped Lloyds TSB

Banking group Lloyds TSB today reported increased lending and satisfactory progress for the year so far as it showed signs of benefiting from a strategic overhaul.

The figure for personal loan and credit card lending was 12% higher than a year earlier.

The bank continued to increase its share of its core markets, with mortgage balances outstanding at March 31 totalling ?73.4bn, an increase of 13% on a year earlier; the net mortgage lending figure was ?2.6bn against ?2.2bn in the first quarter of 2003.

The chief executive, Eric Daniels, said the company remained on course to deliver the improved showing it had promised for the second half of 2004 and beyond.

The improvements came after a year in which Lloyds sold a number of businesses, including the National Bank of New Zealand, as it attempted to focus on core franchises and to remove earnings volatility.

In an update covering the six months to June 30 Lloyds said its core retail banking and mortgages arm continued to progress despite signs of a slowdown in demand for consumer credit and pressure on the profitability of its lending.

This was highlighted in its net interest margin, which was 2.97% compared with 3.03% in the second half of 2003 but still better than a year ago.

Lloyds added that it had seen little change in provisions for bad debts, with the figure expressed as a percentage of average lending broadly similar to 2003 at 0.66%.

Mr Daniels, who is due to announce half-year results on July 30, said he was pleased with the way the restructuring was going.

He added: "We are continuing to make good progress in our key priority to reposition the group for sustainable growth, and we remain well positioned to deliver our planned improved performance in the second half of 2004 and beyond."