Lloyds agrees the sale of Abbey Life

As of 31 December 2006, Abbey Life managed £12bn of assets held in 1.2 million policies.

Regarding its half-year results, Lloyds said income had grown 9% reflecting “strong performance from all divisions”, while cost management had restricted cost growth to 6%.

Charges for bad debts rose 5% to £837m, but in the UK retailing business they fell 1% to £627m. Lloyds added that in the first half of 2007 it had seen fewer customer insolvencies, and said that the charge for UK retailing bad debts for 2007 should be “no higher” than that seen in 2006.

Lloyds also increased its interim dividend by 5%, its first increase for five years. The news helped to push the bank’s shares up 3.5% in morning trade to 553.5p.

“Of particular interest was the bad debts situation, which the company seems to continue to have under control,” said Richard Hunter of Hargreaves Lansdown Stockbrokers.

“The first dividend hike in five years – to a stock which for some time had already provided a whopping 6% yield – was well received as a sign of further management confidence in future prospects.”