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Lloyds TSB (LLOY) – Finals PTP: £4,000m (£4,248m) Divi: 35.9p (34.2p)

Lloyds appears to have come through the sub-prime crisis more or less unscathed. Write downs of £280 million, while slightly higher than the guidance figure of £201 million offered in December, pale into insignificance when set against the £1.6 billion revealed by Barclays (BARC) or the even more astronomical figures reported across the pond.

Adjusted pre-tax profits were up a comparatively healthy 6%, the dividend has, as expected, been increased – up 5% and the company did not need to increase its wholesale funding during the year, therefore keeping a lid on its costs. The bank has now suggested to the market that it will continue to grow the dividend, which is something of a departure given that the increase in the pay out announced alongside its interims was the first for four years. It would be fair to say that this reflects the management’s bullish outlook for the year ahead, chief executive Eric Daniels says: ‘As we look forward to 2008, we do so against a backdrop of turbulent markets and slowing global economic growth.

‘Despite these challenges, we are well positioned to deliver further growth and to take advantage of the opportunities that the current environment offers.’

Daniels adds that the bank has attracted more than £4 billion worth from retail depositors in the second half of last year as customers reacted to the demise of Northern Rock and the wider turmoil on the markets. And while Lloyds was previously seen as a low growth company, it is now benefiting from the inbuilt conservatism of its business model.

Shares says: On a multiple of 7.3 times 2008 earnings, the bank is trading at a premium to the rest of the sector but given the growing dividend and relative security the stock offers it, along with Barclays, Lloyds TSB is probably the best of a bad bunch.

by: Tom Sieber