Lloyds Abbey has been constrained by a lack of distributable profits, but the pressure has eased because of better results from Lloyds Bowmaker, which provides finance for car purchases.
The company is paying a final dividend of 11.7p, increasing the total payout from 17.3p to 18p. Sir Simon Hornby, chairman, said: 'I hope that will be the start of a gradual and progressive improvement in the dividend in the years ahead.'
Shares in Lloyds Abbey fell 15p to 447p, partly because of concern over the slowing growth at Black Horse Financial Services, which sells life insurance and investments to customers of Lloyds Bank.
The group has made an undisclosed provision towards the potential costs of compensating personal pension policyholders who have transferred their benefits out of occupational pension schemes. Lloyds Abbey said this had no significant impact on its total provisions, which life insurers must make for a variety of other reasons.
Lloyds Abbey said it had accepted 52,900 pension transfers involving pounds 433m. Abbey Life sold 30,300 of the policies and Black Horse Financial Services 22,600.
This suggests Lloyds Abbey is responsible for about 10 per cent of all pension transfers, which are the subject of a continuing review by financial regulators. The company, which pulled out of the business last year, said it would compensate customers who had suffered as a result of making a pension transfer.
Profits before tax for 1993 rose by 8.7 per cent to pounds 323.6m. The improvement was entirely due to better results from Lloyds Bowmaker, where profits more than doubled to pounds 38.3m because of reduced bad debts, and from the estate agency business, which reduced its loss to pounds 700,000 from pounds 10.6m in 1992.
Lloyds Abbey again suffered a substantial loss, of pounds 15.9m, from Trans Leben, the German insurer that it is cutting in size.
The group's largest business, Abbey Life, saw after-tax profits fall by 7 per cent to pounds 93.3m, largely because of the extra reserves that had to be set aside due to lower interest rates.
Black Horse Financial Services, the faster-growing of the two life insurance businesses, increased profits by 6 per cent to pounds 80.9m, but some analysts were concerned by the growing proportion of less profitable investment business.
Roger Harvey, of Kleinwort Benson, is forecasting a profit this year of pounds 359m, and a dividend of 19p.
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