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Profits down, but Lloyds is still fighting
(25-02-08) - Lloyds TSB bank have announced a 6% deficit in profits for 2007, but they're still in a strong position to emerge from the credit crisis relatively unscathed.
Profits slumped from £4.25 billion in 2006 to £4 billion in 2007, with write downs increased to £280 million from £200 million.
Lloyds(www.lloydstsb.com) execs presented a sliver lining to their cloud however. If the sales of assets such as Abbey Life are included in the balance sheet, Lloyds TSB is in actuality posting a profit of 5.5%.
Lloyds Chief Executive Eric Daniels pointed to a low risk strategy that helped the bank weather last year’s sub-prime storm:
‘Our lower risk strategy limited the impact of the abrupt change in the markets. Consequently, our charge was relatively modest in comparison to our balance sheet size, our earnings and the charges taken by many other organisations.’
In 2007, one million new customers opened accounts with the bank. It is the UK's largest provider of current accounts and personal loans.
Chris Eagle, Commercial Manager at Credit Choices, believes Lloyds have managed customer’s money wisely in 2007:
‘Strategies employed by Lloyds TSB last year, neatly side stepping the US sub-prime crisis for instance, have safe-guarded their customer’s money and investments. It’s a defensive approach, but it has paid dividends for the bank. Although the economic outlook for 2008 is somewhat uncertain, I expect Lloyds to continue their pragmatic program this year.’
