British bank Lloyds TSB has shrugged off credit market turmoil by reporting a 6% rise in annual profits to £3.92 billion.
The group reported a £280m hit from the credit crunch, but this is a fraction of the £1.6 billion revealed earlier this week by its high street rival Barclays.
Lloyds said its 'prudent approach to risk' had helped it weather the wider market troubles, but cautioned that the industry was facing a turbulent 2008 amid slowing global economic growth.
The rise in pre-tax profits was marginally higher than markets had expected. Lloyds added that, excluding the credit-related impact, profits were up 13% at £4.2 billion.
The group reported lower levels of customer defaults, with bad debt charges within its UK retail arm dropping £14m to £1.22 billion. Lloyds said it did not expect to increase impairment provisions in the first half of this year as it continues to see lower levels of customers falling behind with repayments.
Today's £280m hit from the credit crunch is £80m higher than the losses reported at the end of October.
