British bank Lloyds TSB has just beaten expectations with an 8% rise in underlying half-year profits, as it grew revenue and cut costs in its core UK retail bank business.
Lloyds, Britain's fifth biggest bank, said its profit before tax, volatility and the sale and closure of businesses was £1.75 billion, up from £1.63 billion in the same period last year. Pre-tax profit in the six months to the end of June was £1.78 billion, up from £1.71 billion.
But the bank said its bad debt impairment charge jumped to £800m, up 20% from a year earlier. Lloyds, Britain's biggest unsecured lender, said the bad debt rise was due to a deterioration in unsecured lending, largely due to a change in personal bankruptcy laws last year. This echoed comments from rivals HSBC and HBOS this week.
Lloyds said it expected greater stability in the bad debt charge in the second half after it tightened its lending criteria.
The bank said its UK retail banking income rose 3% while costs fell by 3%.
