Lloyds, the fifth largest bank in the UK, said that the drop was due to the unusually high profit achieved in 2003 due to the divestment of assets in that year. In contrast, Lloyds did grow its profits when only continuing business operations were taken into account.
Profit from continuing operations was up to GBP3.36 billion from GBP3.30 billion in the previous year. Although only a modest increase compared to larger rivals with greater international scope, for example HSBC, the rise did beat city predictions.
Lloyds attributed its growth from business operations to strong results from its wholesale banking division, life insurance division including Scottish Widows, from positive trends in its mortgage and credit card business and from arresting rises in costs.
Mortgage balances rose by 13% to GBP80.1 billion and credit card balances increased by 12% to GBP7.5 billion. The insurance division pre-tax profits rose by 18% to GBP785 million. Best of all, Lloyds’ wholesale business increased its earnings by 23% to GBP1.27 billion.
J Eric Daniels, group chief executive, commented, Looking back on the year, we achieved our three point plan and are now making marked progress on the elements of the Group’s balanced scorecard. Our capital position is in good shape, with the impact of recent accounting changes incorporated into our plans, and we achieved growth and higher quality earnings. I look forward to seeing continued growth and progress against our revised set of priorities in 2005 and beyond.
