British bank Lloyds TSB said it was on track to deliver a good performance in the first half of this year, excluding the writedown of the value of assets tarnished by the credit crunch by £387 million pounds (€497 million).
Lloyds, Britain's fifth biggest bank, said in a trading update today that its pretax profits rose by more than 10 per cent in the first quarter, excluding the writedown and the adverse impact of volatility on its insurance unit.
The bank's £387 million-pound writedown for the quarter is a result of the global credit crunch, and adds to a £280 million pound writedown on assets last year, but it is far less than writedowns reported by most rivals.
Most of the latest loss reflects a £278 million pound cut in the value of the bank's trading portfolio. At the end of March the portfolio contained £200 million pounds of indirect exposure to US subprime mortgages and asset-backed securities collateralised debt obligations (CDOs).
The bank said it would also make a £740 million adjustment to its reserves to reflect a drop in the valuation of assets it expects to hold until maturity.
Lloyds said its core banking businesses had maintained the growth momentum shown last year. It said underlying revenue growth had been well ahead of cost growth and it "significantly improved" its market share of net new mortgage lending.
But it said the overall performance of its wholesale and international banking arm had been hit by the turmoil in financial markets.