Lloyds Raises Writedown, Profit Increases
British bank Lloyds TSB raised its writedown on its exposure to risky assets to 280 million pounds ($547.3 million) on Friday but reported a 6 percent rise in underlying 2007 profit and raised its dividend.
Britain's fifth biggest bank said its annual profit before tax and volatility rose to 3.92 billion pounds, up from 3.71 billion in 2006.
Lloyds raised its final dividend by 5 percent to take its full-year payout to 35.9 pence, also up 5 percent on the year, and said it expects to increase the dividend over time.
Its core UK retail bank profits jumped 17 percent to 1.81 billion pounds, as it opened over 1 million new current accounts and held operating cost growth well behind income growth.
The wholesale and international banking unit's profit fell 12 percent to 1.44 billion pounds after the writedown.
Lloyds had previously flagged a 201 million pound writedown from the impact of a drop in the value of assets following the U.S. subprime housing crisis, but raised that by almost 80 million.
The higher charge is mainly due to a cut in the value of the trading portfolio in its corporate markets unit, with the turmoil hitting profits by 144 million pounds, more than the 90 million estimated in December.
Lloyds wrote down the value of its asset-backed securities collateralized debt obligations (CDOs) by 114 million pounds, compared to 89 million previously flagged, and cut the value of structured investment vehicle (SIV) capital notes by 22 million, unchanged from its last guidance.
Its impairment loss rose by 15 percent on the year to 1.8 billion pounds, but UK retail banking bad debts fell by 1 percent to 1.22 billion. Lloyds said it expected the retail impairment charge in the first half of this year to be similar to the first half of 2007.