UK bank Lloyds TSB narrowly beat expectations with an 8 per cent rise in underlying half-year profits today, as it increased revenue and cut costs in its core UK retail bank business.
Lloyds, Britain's fifth biggest bank, said its profit before tax was £1.75 billion, up from £1.63 billion last year and above an average forecast of £1.72 billion.
Helen Weir, finance director, said retail bank bad debts - which rose 16 per cent on the year to £632 million - would not rise in the second half from the first half, as tightened lending criteria in the past two years feed through.
Lloyds shares were down 0.6 per cent at 531 pence this morning, valuing the bank at £30 billion.
Group underlying income growth was 6 per cent, outpacing cost growth of 1 per cent, improving its ratio of costs to income to 50.6 per cent from 53 per cent.
Sales at Scottish Widows, Lloyds's life insurance arm, jumped 35 per cent in the first half, and Lloyds said the unit was strongly capitalised and would repatriate about £400 million to the group later this year.