Lloyds TSB soothes City on targets

LLOYDS TSB has reassured investors that it has seen little sign of economic downturn and that full-year figures will meet City expectations. The shares rose 14p to 740p as the bank said asset quality remained good and provisions against bad and doubtful debts had barely changed from the half year.

The group has also kept a close watch on expenses. Cost growth has come down since the first half and is expected to be lower than revenue growth for the year. Profit margins have been maintained too.

Loans and advances to customers grew 11% in the 12 months to 30 September, reflecting good performances from mortgages, retail lending and corporate and commercial loans.

The bank's life and pensions business has been affected by the uncertain stock market conditions and has seen a substantial reduction in unit trust sales. It admitted the 22% decline in the FTSE All Share index hit short-term investment returns by £621m but said this should not translate into a permanent loss. 'The group is well positioned to withstand any economic slowdown and continues to produce good results,' said chief executive Peter Ellwood.

Analysts forecast full-year pre-tax profits of £4.26bn for the year to 31 December, from £3.9bn last year.

Standard Chartered has assured employees via an internal memo that it sees its future as an independent bank, following weekend rumours that Barclays and Citibank are interested in acquiring it. Chairman Sir Patrick Gillam is standing down in 2003 and the bank hopes to replace him with Six Continents chairman Sir Ian Prosser.