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Lloyds denies Scottish Widows bid as profits fall

Lloyds Banking Group has posted a nine per cent fall in pre-tax profit for the first three months of the year from £316m to £288m.

The group’s interim management statement for the first quarter also reveals the bank has set aside an additional £375m to cover the cost of compensating customers who were missold payment protection insurance, taking total PPI provision to nearly £3.58bn.

A report in yesterday’s Evening Standard suggested Lloyds had received a multi-billion pound bid for Scottish Widows from Edmund Truell, founder of private equity firm Duke Street. A spokesman for Lloyds subsequently denied it had received any formal takeover approaches.

Lloyds’ interim management statement also reiterates plans to launch an enhanced annuities product and enter the IFA protection market through the Scottish Widows brand, following its exit from the offshore bond market announced in February.

Corporate pension sales have increased by 40 per cent in the first quarter of 2012 on a present value of new business premiums basis. Individual pension sales are up 12 per cent, which Lloyds says has been driven by sales of its retirement account product.

The bank completed £5.7bn of new mortgage business in the quarter, with £1.3bn advanced to first-time buyers.

Lloyds revealed last week it had ended exclusivity talks with the Co-operative Group over the forced sale of its 632 bank branches, required by the European Commission in return for being bailed out by the Government in 2008.

The bank says is making “good progress” on the branch disposal, but is also working on the alternative option of an initial public offering.

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There are 3 comments at the moment, we would love to hear your opinion too.

  1. “Corporate pension sales have increased by 40 per cent in the first quarter of 2012 on a present value of new business premiums basis. Individual pension sales are up 12 per cent, which Lloyds says has been driven by sales of its retirement account product”

    Laughable… their sales are up because they are back to their old tricks of buying the market with cheaper than cheap products.

    Dreadful company, terrible service and we will wait and see what they do with clients after RDR. Widows is not interested in the adviser market place, look forward to any adviser placing business with them being targeted directly in about 12 months time.

  2. It will be interesting to see how many advisers go down the Protection route after RDR.

  3. The 44% nationalised institution that is Lloyds would have to be made an offer they can’t refuse before they’d let SW go (or be told to flog them by the government). If they had any intention of selling this branch of the family tree, they wouldn’t have gone to the expense of closing down the offshore bond operation on the Isle of Man.

    You wouldn’t have to be a genius to figure out why their corporate pension sales have gone up 40%. The problem they have is that to break even on this new business they’ve bought at a huge initial loss, it will have to stick on their books for many years. SW will defend this new book of business very assertively so any IFA introducing GPP business to SW now has to accept the fact that SW will go direct to the employer at the first sign of trouble or if they get twitchy further down the line. That big suitcase full of indemnified commission they just paid you for that GPP comes with baggage, I’m afraid.

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