Lloyds TSB has become the second major high street bank to report that its annual figures have taken a big knock from bad debt.
The company has had to write off almost £1 billion of bad debts across its range of mortgages, credit cards and homeowner loan borrowing.
While the bank’s operations around the world saw profits increase £343 million to £3.82 billion, profits from its British high street division fell £100 million to £1.53 billion.
The knock to profits comes days after Barclays reported that it was suffering under a rising wave of bad debts.
Lloyds denied that it had engaged in irresponsible lending practices.
“It is not in the interests of the individual customer or the group to lend money to a customer who cannot afford to repay,” Lloyds chief executive Eric Daniels told the Evening Standard.
“We take our responsibilities in this regard very seriously and have a responsible lending programme. Over time, we expect the consumer position to stabilise in an improving economy.”
Lloyds has now written off almost £5 in every £100 of unsecured debt that it has lent, up 34 per cent on last year to £905 million.
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