Lloyds TSB said today it had produced a "satisfactory" underlying performance for 2002 despite suffering a 17 per cent fall in pre-tax profits.
The bank, Britain's fifth-largest, blamed the slump on significant stock market turbulence and uncertainty in global economies but said its core businesses continued to perform well.
Customer lending and deposits grew and the bank enjoyed some market share gains in areas including personal loans and credit cards.
Lloyds TSB also said it had made "rigorous" cost controls during the year, including cutting its employee head count by 4,000.
Provisions for bad debts included £50 million sterling in respect of Lloyds TSB's business in Argentina. The bank also increased provisions for certain undisclosed US corporate customers "as a result of their accounting and other irregularities".
Falling world stock markets have put Lloyds TBS's life assurance arm Scottish Widows under pressure along with its British rivals.
Despite the decline in group profits, Lloyds TSB raised the final dividend for shareholders by 1.5 per cent.