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Summary of Group results and strategy
| 2007 £m |
2006 £m |
|
|---|---|---|
| Net interest income | 6,092 | 5,360 |
| Other income | 12,636 | 13,903 |
| Total income | 18,728 | 19,263 |
| Insurance claims | (7,522) | (8,569) |
| Total income, net of insurance claims | 11,206 | 10,694 |
| Operating expenses | (5,491) | (5,429) |
| Trading surplus | 5,715 | 5,265 |
| Impairment | (1,796) | (1,555) |
| Profit before tax* | 3,919 | 3,710 |
| Volatility | ||
| – Insurance | (267) | 84 |
| – Policyholder interests | (233) | 326 |
| Profit on sale of businesses | 657 | – |
| Settlement of overdraft claims | (76) | – |
| Pension schemes related credit | – | 128 |
| Profit before tax | 4,000 | 4,248 |
* Excluding volatility, profit on sale of businesses, the settlement of overdraft claims in 2007 amd the pension schemes related credit in 2006.
Our strategy
Our strategy remains to grow the business through developing long term customer relationships and building our customer franchise. All our businesses are focused on extending the reach and depth of our customer relationships, enhancing product capabilities to build competitive advantage, and improving processing efficiency whilst working capital harder. This will enable us to achieve our vision of being the best financial services organisation in the United Kingdom.
The focus on developing our relationships with personal, commercial and corporate customers, whilst developing innovative products that meet the needs of existing customers and attract new customers, is a key driver for income and business growth. Ensuring we become more efficient in everything we do will help ensure our costs are managed effectively whilst also enabling us to invest in the business to drive further growth. Resource allocation is also increasingly important and significant focus is given to allocating capital to where it will have the most positive impact on our businesses.
Our focus remains on the core business within the UK and in 2007 we continued to move out of non-core markets with the sale of Lloyds TSB Registrars and Abbey Life.
We are already making excellent progress in building the customer franchise and Lloyds TSB is the leading recruiter of new personal current accounts in the UK and has the leading share of new business start-ups. The 2007 results highlight we are on the right track, both in terms of our financial performance and in making further progress in the development of our organic growth strategy.
We believe there remains significant opportunity for organic growth and as we successfully grow the business and develop our skills and capabilities, we will look to expand from a solid foundation of strength. This is likely to be through leveraging our financial strength and enhanced capabilities in new product, customer and geographic markets.