Lloyds TSB Group said today its 2006 profits should meet analysts' expectations for underlying growth of 7 per cent.
Lloyds, the fifth-biggest bank in Britain by market value, said in a pre-year end trading update that its retail bad debts in the second half of the year would be no higher than in the first half, repeating a pledge made at its interim results.
Its first-half bad debt impairment charge jumped 20 per cent from a year earlier to £800 million, including a 16 per cent rise in the UK retail arm to £632 million.
The bank said revenue growth for the year would be "well ahead" of the pace of cost growth and each division's revenue growth would outpace expense growth, resulting in an improvement in the ratio of its costs to revenue.
It said a cost-saving programme is ahead of plan and should deliver a net benefit of over £40 million this year and £100 million to £150 million in 2007.
Lloyds said insurance and investment sales had been strong but that the rate of growth in the second half had slowed from the first half.