Trading Statement

Lloyds TSB Group PLC
23 June 2003


91/03          23 June 2003


LLOYDS TSB - TRADING UPDATE

Lloyds TSB Group plc will shortly be meeting analysts ahead of its close period
for the half-year ending 30 June 2003. This announcement details the information
that will be provided at those meetings.

Lloyds TSB expects to deliver a satisfactory trading performance for the
half-year.

At 31 March 2003 total Group loans and advances to customers were £138.6
billion, an increase of 3 per cent in the first quarter of 2003. This increase
largely reflected good quality growth in the Group's UK mortgage and credit card
portfolios. Total Group risk weighted assets at 31 March 2003 were £125.7
billion. Customer deposits totalled £120.5 billion, an increase of 3.6 per cent
in the first quarter of 2003, as a result of strong growth in current account
balances and international deposits. The Group net interest margin for the first
three months of 2003 was 3.05 per cent compared with a Group net interest margin
of 3.16 per cent in the fourth quarter of 2002. The implementation of the
remedies proposed in March 2002 by the Competition Commission's report,
following its investigation into the supply of banking services to small and
medium sized enterprises (SMEs), reduced the Group net interest margin in the
first quarter of 2003 by some 10 basis points.

Despite a general slowdown in the growth of consumer credit in the UK, the Group
continues to deliver good growth in mortgage and credit card lending and is
growing market share in many of its key product areas, supported by the recent
launch of a number of highly segmented, competitive and innovative product
offers. Net new mortgage lending in the first quarter of 2003 was £2.2 billion,
an estimated market share of 10.9 per cent, compared with £0.7 billion in the
first quarter of 2002.

Overall, weighted sales of life, pensions and unit trust products in the first
five months of 2003 were at a similar level to the comparative period in 2002.
By distribution channel, in the first five months of 2003, weighted sales of
life, pensions and unit trusts via Independent Financial Advisors increased
strongly by 37 per cent, against the same period in 2002, building on the
strength of the Scottish Widows brand and its resources. By contrast, sales via
the branch network remained subdued and fell by 26 per cent against the
comparative period last year.


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LLOYDS TSB - TRADING UPDATE ..../2

Overall sales of general insurance products continue to perform well despite
creditor insurance sales, in the first five months of 2003, being lower than the
comparative period in 2002, as a result of the general slowdown in growth in
personal loan lending.

Strict control of the Group's costs has been maintained and the Group expects
that its cost growth for 2003, excluding the impact of acquisitions and
operating lease depreciation, will be less than the rate of inflation. In the
first quarter of 2003 the impact of acquisitions added £51 million to the
Group's cost base and operating lease depreciation was £52 million (first
quarter 2002: £56 million).

Overall asset quality remains satisfactory, with no material increase in the
level of arrears or non-performing lending. As a result, the annualised charge
for bad and doubtful debts in the first quarter of 2003, as a percentage of
average lending, was lower than the 0.77 per cent charge as a percentage of
average lending for the full year 2002.

In May 2003 the Group agreed the sale of its French fund management and private
banking businesses. A net loss of approximately £15 million will be included in
the profit and loss account of Lloyds TSB Group for the half-year ending 30 June
2003. Following approaches, Lloyds TSB is considering its options relating to
its subsidiary, The National Bank of New Zealand. The Group is undertaking a
strategic review so that potential offers for The National Bank of New Zealand,
as well as retention of the business, can be considered.

During the first quarter of 2003 improved secondary bond market conditions have
allowed the Group to reduce its Emerging Markets Debt portfolio. As a result,
profits on bond sales, and mark-to-market gains in the first quarter of the year
totalled some £90 million. This income was however partly offset by lower than
expected 'other finance income' as the Group pension schemes' returns have been
reduced by the effect of lower asset values. In the first quarter of 2003, other
finance income totalled £8 million (first quarter 2002: £42 million). The
increase in the FTSE All Share Index in the first five months of 2003 led to a
positive investment variance of £58 million during that period.

The Group continues to carry out, in conjunction with the regulator, its
investigation into the appropriateness of certain sales of the Extra Income &
Growth Plan, a stock market related investment product sold in 2000 and 2001.
This investigation is expected to be completed within the next few months when
the Group will be in a better position to quantify the financial effect. During
the first quarter of 2003 there has also been an increase in the level of
complaints relating to Group sales and performance of certain endowment based
and long-term savings products. Whilst the Group maintains provisions for
redress to policyholders in respect of past sales, further provisions and
charges will arise in 2003 to cover these issues.


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LLOYDS TSB - TRADING UPDATE ..../3

No changes in accounting policies are expected in the first half of 2003. The
attached appendix provides detailed half-year comparative figures for 2002 which
reflect changes in accounting policies and presentation implemented during 2002.

                                    - ends -

For further information:-

Investor Relations

Michael Oliver                               [phone]

Director of Investor Relations

E-mail: [e-mail]

Ian Gordon                                   [phone]

Senior Manager, Investor Relations

E-mail: [e-mail]

Media

Terrence Collis                               [phone]

Director of Group Corporate Communications

E-mail: [e-mail]

Mary Walsh                                    [phone]

Head of Media Relations

E-mail: [e-mail]



                           FORWARD LOOKING STATEMENTS

This announcement contains forward looking statements with respect to the
business, strategy and plans of the Lloyds TSB Group and its current goals and
expectations relating to its future financial condition and performance.
Statements that are not historical facts, including statements about Lloyds TSB
Group's or management's beliefs and expectations, are forward looking
statements. By their nature, forward looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that will
occur in the future. Lloyds TSB Group's actual future results may differ
materially from the results expressed or implied in these forward looking
statements as a result of a variety of factors, including UK domestic and global
economic and business conditions, risks concerning borrower credit quality,
market related risks such as interest rate risk and exchange rate risk in its
banking businesses and equity risk in its insurance businesses, inherent risks
regarding changing demographic developments, catastrophic weather and similar
contingencies outside Lloyds TSB Group's control, any adverse experience in
inherent operational risks, any unexpected developments in regulation or
regulatory actions, changes in customer preferences, competition, industry
consolidation, acquisitions and other factors. For more information on these and
other factors, please refer to Lloyds TSB Group's Annual Report on Form 20-F
filed with the US Securities and Exchange Commission and to any subsequent
reports furnished by Lloyds TSB Group to the US Securities and Exchange
Commission or to the London Stock Exchange. The forward looking statements
contained in this announcement are made as of the date hereof, and Lloyds TSB
Group undertakes no obligation to update any of its forward looking statements.

                                    APPENDIX

LLOYDS TSB GROUP

                      consolidated profit and loss account

                                                                                Half-year to        Half-year to
                                                                                  30 June           31 December
                                                                                    2002                  2002
                                                                                     £m                    £m
Interest receivable:
  Interest receivable and similar income arising from
securities
  debt securities                                                                      278                 289
  Other interest receivable and similar income                                       4,868               5,114
Interest payable                                                                     2,589               2,789
Net interest income                                                                  2,557               2,614
Other finance income                                                                    85                  80
Other income
Fees and commissions receivable                                                      1,523               1,530
Fees and commissions payable                                                          (306)               (339)
Dealing profits (before expenses)                                                       88                 100
Income from long-term assurance business                                                23                (326)
General insurance premium income                                                       235                 251
Other operating income                                                                 392                 371
                                                                                     1,955               1,587
Total income                                                                         4,597               4,281
Operating expenses
Administrative expenses                                                              2,040               2,174
Depreciation                                                                           299                 343
Amortisation of goodwill                                                                21                  38
Depreciation and amortisation                                                          320                 381
Total operating expenses                                                             2,360               2,555
Trading surplus                                                                      2,237               1,726
General insurance claims                                                               107                 122
Provisions for bad and doubtful debts
Specific                                                                               451                 514
General                                                                                 28                  36
                                                                                       479                 550
Amounts written off fixed asset investments                                             39                  48
Operating profit                                                                     1,612               1,006
Income from joint ventures                                                              (8)                 (3)
Profit on ordinary activities before tax                                             1,604               1,003
Tax on profit on ordinary activities                                                   462                 302
Profit on ordinary activities after tax                                              1,142                 701
Minority interests     - equity                                                          9                  10
          - non-equity                                                                  20                  23
Profit for the period attributable to shareholders                                   1,113                 668
Dividends                                                                              597               1,311
Profit (loss) for the period                                                           516                (643)
Earnings per share                                                                   20.0p               12.0p
Diluted earnings per share                                                           19.9p               11.9p



LLOYDS TSB GROUP

                               segmental analysis
Half-year ended 30 June 2002   UK Retail      
                                Banking       Insurance  
                                  and            and        Wholesale   International      Central
                               Mortgages     Investments     Markets       Banking       group items       Total
                                   £m            £m             £m             £m            £m             £m
Net interest income           1,680          33            579            383            (118)         2,557
Other finance income          -              -             -              -              85            85
Other operating income        533            1,073         447            188            113           2,354
Total income                  2,213          1,106         1,026          571            80            4,996
Operating expenses            1,313          242           512            277            16            2,360
Trading surplus               900            864           514            294            64            2,636
General insurance claims      -              107           -              -              -             107
Bad debt provisions           270            -             151            63             (5)           479
Amounts written off
fixed asset investments       -              -             9              -              30            39
Income from joint ventures    (8)            -             -              -              -             (8)
Profit before tax*            622            757           354            231            39            2,003
Investment variance           -              (399)         -              -              -             (399)
Profit before tax             622            358           354            231            39            1,604
*excluding investment variance
Half-year ended 31 December     
2002                           UK Retail   
                                Banking      Insurance
                                  and           and         Wholesale  International      Central
                               Mortgages    Investments      Markets      Banking       group items        Total
                                  £m             £m            £m             £m             £m             £m
Net interest income           1,742         41             597           367            (133)          2,614
Other finance income          -             -              -             -              80             80
Other operating income        543           792            528           186            36             2,085
Total income                  2,285         833            1,125         553            (17)           4,779
Operating expenses            1,370         240            621           304            20             2,555
Trading surplus               915           593            504           249            (37)           2,224
General insurance claims      -             122            -             -              -              122
Bad debt provisions           293           -              160           99             (2)            550
Amounts written off
fixed asset investments       -             -              48            -              -              48
Income from joint ventures    (3)           -              -             -              -              (3)
Profit before tax*            619           471            296           150            (35)           1,501
Changes in economic
assumptions                   -             55             -             -              -              55
Investment variance           -             (553)          -             -              -              (553)
Profit before tax             619           (27)           296           150            (35)           1,003


*excluding investment variance and changes in economic assumptions



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