Pain postponed

4 December 2002 By Hugo Dixon, Hugo Dixon

Pain postponed

4 December 2002 By Hugo Dixon, Hugo Dixon, Hugo Dixon, Hugo Dixon, Hugo Dixon, Hugo Dixon, Hugo Dixon

Margins have shrunk, bad debt provisions are rising and there are new charges for misselling life and pension policies. Those hoping that Lloyds would grasp the nettle and cut its dividend will be disappointed. That may not happen until there is a new CEO.

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Lloyds TSB said in a statement it would boost provisions for corporate loans. Although it did not specify how big the extra provisions would be, a person familiar with the situation said they were expected to be in tens of millions of pounds.

The bank also revealed that its net interest margin for the nine months to endSeptember was 3.21% down from 3.27% in the six months to endJune.

Meanwhile, group loans and advances to customers were £132.6bn – an annualised increase of 9%.

Lloyds will also take £205m in provisions for misselling endowment policies and pensions.

£165m relates to endowment policies sold in the late 1980s and early 1990s by Abbey Life, which Lloyds has now largely pulled out of. £40m relates to extra provisions for pension misselling. The bank's total provisions for pension misselling now add up to £1bn.

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