Lloyds profit up 6 pct on UK growth, writedown up

British bank Lloyds TSB reported a 6 percent rise in underlying 2007 profit and raised its dividend on Friday, absorbing a rise in its writedown on risky assets and sending its shares over 5 percent higher.

Britain’s biggest provider of current accounts said its annual profit before tax and volatility rose to 3.92 billion pounds ($7.7 billion), up from 3.71 billion in 2006.

Revenue growth of 5 percent outpaced cost growth of 1 percent, and Lloyds’ core UK retail bank profit jumped 17 percent to 1.81 billion pounds, as it opened over 1 million new current accounts.

Analysts said the results were slightly ahead of expectations, writedowns compared favourably to other major financial firms and the outlook statement was positive.

Lloyds raised its final dividend by 5 percent to take its full-year payout to 35.9 pence, also up 5 percent on the year, and said it expects to increase the dividend over time.

Lloyds’ interim dividend increase was its first rise for five years, but turmoil in financial markets since then reignited concern whether it could be sustained. Daniels said the bank had no hesitation in raising the payout.