SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
23 June 2003
LLOYDS TSB GROUP plc
(Translation of registrant's name into English)
71 Lombard Street
London EC3P 3BS
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F..X..Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes .....No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________
Index to Exhibits
Item
No. 1 Regulatory News Service Announcement, dated 23 June 2003
re: Trading Statement
91/03 23 June 2003
LLOYDS TSB - TRADING UPDATE
Lloyds TSB Group plc will shortly be meeting analysts ahead of its close period
for the half-year ending 30 June 2003. This announcement details the information
that will be provided at those meetings.
Lloyds TSB expects to deliver a satisfactory trading performance for the
half-year.
At 31 March 2003 total Group loans and advances to customers were GBP138.6
billion, an increase of 3 per cent in the first quarter of 2003. This increase
largely reflected good quality growth in the Group's UK mortgage and credit card
portfolios. Total Group risk weighted assets at 31 March 2003 were GBP125.7
billion. Customer deposits totalled GBP120.5 billion, an increase of 3.6 per
cent in the first quarter of 2003, as a result of strong growth in current
account balances and international deposits. The Group net interest margin for
the first three months of 2003 was 3.05 per cent compared with a Group net
interest margin of 3.16 per cent in the fourth quarter of 2002. The
implementation of the remedies proposed in March 2002 by the Competition
Commission's report, following its investigation into the supply of banking
services to small and medium sized enterprises (SMEs), reduced the Group net
interest margin in the first quarter of 2003 by some 10 basis points.
Despite a general slowdown in the growth of consumer credit in the UK, the Group
continues to deliver good growth in mortgage and credit card lending and is
growing market share in many of its key product areas, supported by the recent
launch of a number of highly segmented, competitive and innovative product
offers. Net new mortgage lending in the first quarter of 2003 was GBP2.2
billion, an estimated market share of 10.9 per cent, compared with GBP0.7
billion in the first quarter of 2002.
Overall, weighted sales of life, pensions and unit trust products in the first
five months of 2003 were at a similar level to the comparative period in 2002.
By distribution channel, in the first five months of 2003, weighted sales of
life, pensions and unit trusts via Independent Financial Advisors increased
strongly by 37 per cent, against the same period in 2002, building on the
strength of the Scottish Widows brand and its resources. By contrast, sales via
the branch network remained subdued and fell by 26 per cent against the
comparative period last year.
..../more
LLOYDS TSB - TRADING UPDATE ..../2
Overall sales of general insurance products continue to perform well despite
creditor insurance sales, in the first five months of 2003, being lower than the
comparative period in 2002, as a result of the general slowdown in growth in
personal loan lending.
Strict control of the Group's costs has been maintained and the Group expects
that its cost growth for 2003, excluding the impact of acquisitions and
operating lease depreciation, will be less than the rate of inflation. In the
first quarter of 2003 the impact of acquisitions added GBP51 million to the
Group's cost base and operating lease depreciation was GBP52 million (first
quarter 2002: GBP56 million).
Overall asset quality remains satisfactory, with no material increase in the
level of arrears or non-performing lending. As a result, the annualised charge
for bad and doubtful debts in the first quarter of 2003, as a percentage of
average lending, was lower than the 0.77 per cent charge as a percentage of
average lending for the full year 2002.
In May 2003 the Group agreed the sale of its French fund management and private
banking businesses. A net loss of approximately GBP15 million will be included
in the profit and loss account of Lloyds TSB Group for the half-year ending 30
June 2003. Following approaches, Lloyds TSB is considering its options relating
to its subsidiary, The National Bank of New Zealand. The Group is undertaking a
strategic review so that potential offers for The National Bank of New Zealand,
as well as retention of the business, can be considered.
During the first quarter of 2003 improved secondary bond market conditions have
allowed the Group to reduce its Emerging Markets Debt portfolio. As a result,
profits on bond sales, and mark-to-market gains in the first quarter of the year
totalled some GBP90 million. This income was however partly offset by lower than
expected 'other finance income' as the Group pension schemes' returns have been
reduced by the effect of lower asset values. In the first quarter of 2003, other
finance income totalled GBP8 million (first quarter 2002: GBP42 million). The
increase in the FTSE All Share Index in the first five months of 2003 led to a
positive investment variance of GBP58 million during that period.
The Group continues to carry out, in conjunction with the regulator, its
investigation into the appropriateness of certain sales of the Extra Income &
Growth Plan, a stock market related investment product sold in 2000 and 2001.
This investigation is expected to be completed within the next few months when
the Group will be in a better position to quantify the financial effect. During
the first quarter of 2003 there has also been an increase in the level of
complaints relating to Group sales and performance of certain endowment based
and long-term savings products. Whilst the Group maintains provisions for
redress to policyholders in respect of past sales, further provisions and
charges will arise in 2003 to cover these issues.
..../more
LLOYDS TSB - TRADING UPDATE ..../3
No changes in accounting policies are expected in the first half of 2003. The
attached appendix provides detailed half-year comparative figures for 2002 which
reflect changes in accounting policies and presentation implemented during 2002.
- ends -
For further information:-
Investor Relations
Michael Oliver +44 (0) 20 7356 2167
Director of Investor Relations
E-mail: michael.oliver@ltsb-finance.co.uk
Ian Gordon +44 (0) 20 7356 1264
Senior Manager, Investor Relations
E-mail: ian.gordon@ltsb-finance.co.uk
Media
Terrence Collis +44 (0) 20 7356 2078
Director of Group Corporate Communications
E-mail: terrence.collis@lloydstsb.co.uk
Mary Walsh +44 (0) 20 356 2121
Head of Media Relations
E-mail: mary.walsh@lloydstsb.co.uk
FORWARD LOOKING STATEMENTS
This announcement contains forward looking statements with respect to the
business, strategy and plans of the Lloyds TSB Group and its current goals and
expectations relating to its future financial condition and performance.
Statements that are not historical facts, including statements about Lloyds TSB
Group's or management's beliefs and expectations, are forward looking
statements. By their nature, forward looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that will
occur in the future. Lloyds TSB Group's actual future results may differ
materially from the results expressed or implied in these forward looking
statements as a result of a variety of factors, including UK domestic and global
economic and business conditions, risks concerning borrower credit quality,
market related risks such as interest rate risk and exchange rate risk in its
banking businesses and equity risk in its insurance businesses, inherent risks
regarding changing demographic developments, catastrophic weather and similar
contingencies outside Lloyds TSB Group's control, any adverse experience in
inherent operational risks, any unexpected developments in regulation or
regulatory actions, changes in customer preferences, competition, industry
consolidation, acquisitions and other factors. For more information on these and
other factors, please refer to Lloyds TSB Group's Annual Report on Form 20-F
filed with the US Securities and Exchange Commission and to any subsequent
reports furnished by Lloyds TSB Group to the US Securities and Exchange
Commission or to the London Stock Exchange. The forward looking statements
contained in this announcement are made as of the date hereof, and Lloyds TSB
Group undertakes no obligation to update any of its forward looking statements.
APPENDIX
LLOYDS TSB GROUP
consolidated profit and loss account
Half-year to Half-year to
30 June 31 December
2002 2002
GBPm GBPm
Interest receivable:
Interest receivable and similar income arising from
securities
debt securities 278 289
Other interest receivable and similar income 4,868 5,114
Interest payable 2,589 2,789
Net interest income 2,557 2,614
Other finance income 85 80
Other income
Fees and commissions receivable 1,523 1,530
Fees and commissions payable (306) (339)
Dealing profits (before expenses) 88 100
Income from long-term assurance business 23 (326)
General insurance premium income 235 251
Other operating income 392 371
1,955 1,587
Total income 4,597 4,281
Operating expenses
Administrative expenses 2,040 2,174
Depreciation 299 343
Amortisation of goodwill 21 38
Depreciation and amortisation 320 381
Total operating expenses 2,360 2,555
Trading surplus 2,237 1,726
General insurance claims 107 122
Provisions for bad and doubtful debts
Specific 451 514
General 28 36
479 550
Amounts written off fixed asset investments 39 48
Operating profit 1,612 1,006
Income from joint ventures (8) (3)
Profit on ordinary activities before tax 1,604 1,003
Tax on profit on ordinary activities 462 302
Profit on ordinary activities after tax 1,142 701
Minority interests - equity 9 10
- non-equity 20 23
Profit for the period attributable to shareholders 1,113 668
Dividends 597 1,311
Profit (loss) for the period 516 (643)
Earnings per share 20.0p 12.0p
Diluted earnings per share 19.9p 11.9p
LLOYDS TSB GROUP
segmental analysis
Half-year ended 30 June 2002 UK Retail
Banking Insurance
and and Wholesale International Central
Mortgages Investments Markets Banking Group items Total
GBPm GBPm GBPm GBPm GBPm GBPm
Net interest income 1,680 33 579 383 (118) 2,557
Other finance income - - - - 85 85
Other operating income 533 1,073 447 188 113 2,354
Total income 2,213 1,106 1,026 571 80 4,996
Operating expenses 1,313 242 512 277 16 2,360
Trading surplus 900 864 514 294 64 2,636
General insurance claims - 107 - - - 107
Bad debt provisions 270 - 151 63 (5) 479
Amounts written off
fixed asset investments - - 9 - 30 39
Income from joint ventures (8) - - - - (8)
Profit before tax* 622 757 354 231 39 2,003
Investment variance - (399) - - - (399)
Profit before tax 622 358 354 231 39 1,604
*excluding investment variance
Half-year ended 31 December
2002 UK Retail
Banking Insurance
and and Wholesale International Central
Mortgages Investments Markets Banking group items Total
GBPm GBPm GBPm GBPm GBPm GBPm
Net interest income 1,742 41 597 367 (133) 2,614
Other finance income - - - - 80 80
Other operating income 543 792 528 186 36 2,085
Total income 2,285 833 1,125 553 (17) 4,779
Operating expenses 1,370 240 621 304 20 2,555
Trading surplus 915 593 504 249 (37) 2,224
General insurance claims - 122 - - - 122
Bad debt provisions 293 - 160 99 (2) 550
Amounts written off
fixed asset investments - - 48 - - 48
Income from joint ventures (3) - - - - (3)
Profit before tax* 619 471 296 150 (35) 1,501
Changes in economic
assumptions - 55 - - - 55
Investment variance - (553) - - - (553)
Profit before tax 619 (27) 296 150 (35) 1,003
*excluding investment variance and changes in economic assumptions
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LLOYDS TSB GROUP plc
(Registrant)
By: M D Oliver
Name: M D Oliver
Title: Director of Investor Relations
Date: 23 June 2003