Lloyds TSB has seen profits plunge by 70% over the first half of the year due to the credit crunch and woes in its insurance business. It comes despite the rest of its business, including retail banking, “performing well”.
The financial services group reported a pre-tax profit of £599m for the first six months of the year compared to £1.99bn over the same period last year. It has also been hit with a further £585m hit from the credit crunch and investment writedowns, and a significant drop in the value of investments in its Scottish Widows division.
The company points out that excluding the impact of the market, its pre-tax profits were up by 11% to £2.16bn, and its retail banking arm increased profit by 15% to £911m. It says customer deposits have risen by 19% over the past year, but that mortgages are down. It adds that net new UK mortgage lending is expected to be around £60bn for the year compared to £108bn last year.