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
09 December, 2005
LLOYDS TSB GROUP plc
(Translation of registrant's name into English)
5th Floor
25 Gresham Street
London
EC2V 7HN
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 09 December, 2005
re: Trading Statement
230/05
12 December 2005
LLOYDS TSB - TRADING UPDATE
Lloyds TSB Group plc will shortly be meeting analysts ahead of its close period
for the year ending 31 December 2005. This announcement sets out the
information that will be provided at those meetings.
On a comparable basis under International Financial Reporting Standards*, Lloyds
TSB expects to deliver a satisfactory trading performance for the year. The
Group has continued to make good progress in the delivery of its organic growth
strategies. Further good progress has been made in the growth of customer
assets and liabilities and, in the second half of 2005 to date, the group net
interest margin has been broadly stable. This, combined with continued strong
cost control, means that the Group expects to deliver revenue growth in excess
of cost growth in each division. The Group's impairment charge, as a percentage
of average lending, is expected to be broadly consistent with the charge of 0.63
per cent experienced in the first half of 2005. Strong credit quality in our
business and corporate lending portfolios has continued to be offset, as
expected, by higher impairment levels in the unsecured consumer lending
portfolios. Overall, the Group expects to be in line with market
expectations**.
The retail bank has continued to make progress in quality customer recruitment
and customer lending and deposit growth. Mortgage lending has remained strong
with asset quality remaining robust. However, against the backdrop of slower
growth in consumer lending, the retail bank has experienced lower levels of
growth in unsecured consumer lending, together with some further deterioration
in credit quality as more customers, with higher levels of indebtedness, have
experienced repayment difficulties. This will lead to an increase in the level
of UK Retail Banking impairment provisions as a percentage of average lending,
on a comparable basis, for the second half of 2005.
Scottish Widows has continued to make good progress in both the bancassurance
and independent financial adviser channels. Bancassurance volumes, particularly
unit trust/OEIC sales, have increased significantly in comparison with 2004 and
continued high levels of growth have been experienced through independent
financial advisers, particularly in the sale of investment and pension products.
The life and pensions new business margin remains robust, reflecting further
improvements in efficiency. Scottish Widows continues to be one of the most
strongly capitalised life assurance companies in the UK and we intend to
repatriate GBP800 million of surplus capital from Scottish Widows to the Group
by the end of the year. This is in addition to the GBP200 million dividend
paid to the Group in March 2005, which reflected the start of an expected
regular annual dividend stream.
In General Insurance good levels of profit growth have continued, reflecting
improved customer retention and continued increases in internet and telephony
sales as well as further improvements in efficiency, particularly in the claims
process.
In Wholesale and International Banking we continue to make excellent progress.
In Business Banking and Corporate Markets in particular, we are achieving
significant gains through product and relationship cross-sell and new customer
acquisition. Business Banking has maintained its market leadership position in
the recruitment of start-up customers, and remains a net gainer in the
recruitment of customers from other banks. Overall asset quality remains very
good, with levels of impairment provisions expected to remain low for the year.
The Group's capital ratios remain robust and, as anticipated, the rate of
risk-weighted asset growth in the second half of 2005 is expected to be slower
than the rate of growth in the first half.
In the first 10 months of 2005, the strong performance of equity markets has
contributed to positive volatility relating to the insurance business of GBP306
million. This has been partly offset by adverse banking volatility, reflecting
the adoption in IFRS of fair values for the Group's derivative portfolios, of
GBP79 million.
Following the publication of revised annuitant mortality assumption tables by
the actuarial profession's Mortality Committee, the Group is in the process of
reviewing the annuitant mortality assumptions used in its life assurance
businesses. While these tables are not mandatory for 2005 year-end reporting
purposes, it is likely that the Group will strengthen its mortality related
reserves during 2005. In addition, following the introduction of time-barring,
the Group is also in the process of reviewing the estimated cost of redress
payments to customers, principally relating to past sales of mortgage endowment
policies. This is expected to lead to an increased provision for customer
redress in the Group's 2005 accounts. The combined impact of these two items,
which will be evenly split, is expected to be a charge of circa GBP300 million.
Eric Daniels, Group Chief Executive, said "We are continuing to make good
progress against our objective to deliver sustained earnings growth,
particularly against the backdrop of the slower consumer environment in the UK.
The Group has also taken the opportunity to strengthen its reserves for
annuitant mortality and customer redress provisions.
We have delivered good revenue growth throughout the Group, strong cost control
has been maintained, and overall credit quality continues to remain
satisfactory. As a result, the Group is on track to deliver a trading
performance for 2005 which is in line with market expectations."
* Excluding the impact of prospective accounting changes relating to the
implementation of IFRS. For more information see the Group's 2005
half-year results statement.
** On 9 December 2005, the consensus of analysts' forecasts for profit before
tax, excluding volatility, on a full IFRS basis for the year ending
31 December 2005 was GBP3,315 million.
2005 Results Timetable
Preliminary results announcement: Friday, 24 February 2006
Ex dividend date: Wednesday, 8 March 2006
Dividend record date: Friday, 10 March 2006
Dividend payment date: Wednesday, 3 May 2006
For further information:-
Investor Relations
Michael Oliver +44 (0) 20 7356 2167
Director of Investor Relations
E-mail: michael.oliver@ltsb-finance.co.uk
Media
Mary Walsh +44 (0) 20 7356 2121
Director of Corporate 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.
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: 09 December, 2005