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Profits slide at Widows

Scottish Widows&#39 financial performance helped cast a sha-dow over Lloyds TSB&#39s interim results, with the subsidiary&#39s profits dropping £114m to £194m.

Scottish Widows Investment Partnership added to the woes with a loss of £1m from a £6m profit at the same time last year.

The results show that Scottish Widows&#39 profits dropped to £194m from £308m, with the now closed Abbey Life achieving £41m down from £57m.

Lloyds reports that profits from its insurance and investment businesses were down by £268m to £489m from £757m but this figures includes £100m set aside for customer redress.

Overall, Lloyds reported a 18 per cent drop in profits to £1.6bn from £2bn before economic and investment considerations were taken into account. The bank has also had to allow £300m as a group for endowment and bonds misselling.

The results have fuelled market speculation that Lloyds may cut Widows loose or that chief executive Mike Ross may step down, both of which have been vigorously denied by the bank and the insurer.

Wentworth Rose managing director Philip Rose says: “Scottish Widows in particular seems to have lost its way somewhat. Since being bought by Lloyds TSB, it has not really seemed to be that clear on its commitment to IFAs and the main financial services market and its results rep-resent that.

“The question is whether Lloyds will decide to revitalise it or decide that the insurance industry is having such a bad time and let Scottish Widows go.”

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