LONDON (SHARECAST) - HBOS merger partner Lloyds TSB has seen a big profit fall in its first nine months due to the impact of market dislocation, insurance related volatility and higher impairments.
Excluding the impact of market dislocation and insurance related volatility, each division has achieved revenue growth in excess of cost growth, it said.
"Despite the extremely challenging market and economic conditions, the group remains on track to deliver a good trading performance during 2008, notwithstanding lower statutory profits as a result of the impact of market dislocation, insurance related volatility and higher impairment charges," chief executive Eric Daniels said.
Overall, group asset quality remains satisfactory, it added, despite higher impairment losses on loans and advances, largely reflecting the impact of lower house prices on the mortgage impairment charge and higher corporate impairments, reflecting the ongoing deterioration in the UK economic environment and global financial markets.
In the Retail Bank, arrears and delinquency trends in unsecured lending portfolios have remained satisfactory. Whilst arrears in the personal loan portfolio have continued to reduce, the group's credit card and overdraft portfolios are showing slightly higher arrears than twelve months ago, reflecting the challenging economic environment, the statement added.
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