Lloyds TSB group said it is set to deliver "satisfactory" first-half results, with a continued rise in bad debts partly offsetting an improved trading performance.
In a trading statement ahead of its August 2nd interim results announcement, Lloyds said bad debt charges for the first half will be higher compared with a year earlier, although the rate of increase will be below the 21 per cent upsurge seen in the first half of 2005.
That will take the shine off a "strong" trading performance, driven by cost controls and robust growth in sales of savings products at the retail banking business.
Lloyds finance chief Helen Weir said provided there is no further deterioration in the economic climate, the bad debt charge should stabilise in the second half of 2006, allowing the bank to reap the earnings benefit of its stronger trading performance in 2007.
"All other things being equal, we should start to see the benefits next year," she told reporters.
Lloyds, in common with other UK lenders, was hit in the first half of 2005 by a sharp rise in debt arrears as rising interest rates and energy bills put borrowers' finances under pressure.
PA
