Lloyds TSB Group has boosted lending at its core British business this year, but the bank disappointed traders who had hoped for a more upbeat outlook in a trading statement today.
The bank said first-half performance would be "satisfactory" as it held or improved mortgage and credit card market shares, and repeated comments that it was on track for improved performance this year.
"The Lloyds statement was a bit bland. A few people were buying them last week looking for something special but there's nothing there," one trader said.
Chief Executive Mr Eric Daniels, who took over a year ago, is trying to improve returns from the British operations of Lloyds TSB, Britain's biggest provider of current accounts, after three years of stagnant earnings and muted revenue growth.
The bank increased first-quarter mortgage balances by 13 per cent to £73.4 billion sterling from a year earlier, and unsecured lending rose 12 per cent. Current and savings account balances rose 9 per cent in the first quarter from a year earlier, the bank added.
The bank's net interest margin, which measures lending profitability, narrowed to 2.97 per cent in the first quarter from 3.03 per cent in the second half of last year.
Investors are concerned that as interest rates rise and consumers rein in spending, bank profits will be hit as they are forced to battle for business. Lloyds TSB said it had seen a slowing of consumer lending.
The bank will publish first-half results on July 30th.