Lloyds which employs 81400 people has not ruled out compulsory redundancies
Lloyds, which employs 81,400 people, has not ruled out compulsory redundancies.Pre-tax profits fell 8 per cent to £3.55bn last year as bad debt provisions climbed 38 per cent to £747m, including £100m of provisions for the Argentina crisis. A £30m hit was attributable to a company thought to be linked to the collapse of Enron. Falling stock markets hit investments at Scottish Widows to the tune of £648m.Mr Ellwood warned of “some issues” in Lloyds’ wholesale operations, which include corporate lending, that would see bad debt provisions rise higher still this year. Any fall in consumer confidence could jeopardise the health of the UK economy, he also warned.The core UK retail banking operation saw profits slide by some 18 per cent, to £633m.
While mortgage profits grew, market share declined as customers switched to rivals upon the expiry of fixed-rate deals. Overall, group revenue rose 10 per cent to £9.54bn.Lloyds shares fell 40.5p to 734.5p amid concerns that renewed investment in the business would increase costs when the scope for return was uncertain. The bank gained favour among investors in the 1990s by growing profits in the mature UK retail banking sector through aggressive cost cuts.Mr Ellwood, who was thwarted in a bid for Abbey National last year, claimed there was still growth to be had in the UK, but said he was less confident of achieving a cross-border deal. Last year, the former chairman Sir Brian Pitman, now an adviser to Morgan Stanley, paraded Lloyds’s ambitions for a merger of equals in Europe.”Parochialism is too strong a word, but there is nationalism,” Mr Ellwood said. “A deal] is not going to happen as soon as we would have hoped.”Wealth management, another alternative source of growth for the group, was “slowing down”, Mr Ellwood admitted.”Earnings look to be pretty dull over the next 12 to 24 months,” said one analyst..
P&O Princess Cruises’s dream of becoming the world’s largest cruise ship operator was dealt a blow by its own shareholders after investors ignored the board’s advice and opted to adjourn a meeting convened to vote through its proposed £4.8bn merger with Royal Caribbean. The move clears the way for investors to consider a £3.9bn hostile takeover bid from Carnival Cruises, the US cruise giant.Peter Ratcliffe, Princess’s chief executive, was at pains to stress that the result of the fraught voting process did not alter his intention to merge with Royal. While he said he would “clearly have preferred to have the Royal transaction approved”, he added that he was “okay” with the outcome. “I’m the first to understand that shareholders have their right to request more time. There is no issue there,” he said.The adjournment was a victory for Carnival, which had lobbied hard to persuade investors to back the motion, proposed at its request. Micky Arison, Carnival’s chairman and chief executive, said: “Yesterday was a very strong vote for the value of our proposal.
