UK banking group Lloyds TSB today revealed a further £387m sterling hit from the credit crunch, but signalled there would be no need for a cash call to investors.
The bank said its funding position was strong and it was 'firmly on track' to deliver a good first half performance.
Each division saw 'double digit' growth in profits before tax in the first quarter, excluding the credit crisis impact, according to Lloyds.
The writedown adds to £280m already reported by the group last year, but is far less than that reported by its 'big five' UK banking rivals.
Lloyds hailed its lower risk strategy for helping it weather the financial turmoil and said its liquidity was robust, suggesting it would not be following the lead of its rivals Royal Bank of Scotland and Halifax Bank of Scotland with multi-billion pound rights issues.
'Despite the more challenging market conditions, the group remains firmly on track to deliver a good performance for the first half of 2008, excluding the impact of market dislocation and insurance related volatility,' commented group CEO Eric Daniels.
The group, which is the UK's biggest personal current account bank, said it had continued to build on its strong customer deposit base, with growth in bank savings and cash individual savings accounts.
Lloyds also stressed it had been able to improve its market share of new mortgage lending in spite of the credit squeeze crippling the home loan sector.
It said it expected to see 'notable profit growth' in the home insurance operation as it kept costs under control and in the absence of last year's unusually high weather-related claims.
Lloyds's wholesale and international banking division took the £387m credit crunch hit to first quarter pre-tax profits, although this was 'relatively limited', said Lloyds. It added that it still had £200m in indirect exposure to US sub-prime mortgage related investments.
