Banking group Lloyds TSB has remained upbeat despite reporting an increase in the number of its high street customers in repayment difficulties.
Lloyds said it was on track for a "satisfactory trading performance" in the first half of 2005, adding that its core retail division continued to make progress in the face of a slowdown in consumer spending.
In line with its rivals, the group said the retail arm made greater provision than a year earlier to cover the rise in the number of customers in arrears.
But it said this had been offset by a lower provision in the group's corporate lending operations.
Lloyds, which owns the Scottish Widows and Cheltenham & Gloucester brands, has around 15 million personal customers and more than 2,000 branches.
In March, the company announced a 20 per cent fall in annual pretax profits to £3.5 billion, although the decline reflected the impact of businesses sold in 2003, which contributed nearly £1.2 billion to the bottom line a year earlier.
Profits from continuing operations lifted by ten per cent to £3.4 billion as all its divisions improved their performance.
In yesterday's update, chief executive Eric Daniels said the group continued towards its objective of sustained earnings growth, despite "a slowing consumer environment".
The statement said the high street division was expected to achieve healthy levels of customer lending and deposit balance growth during the half year.
It added: "The rate of consumer lending growth in the first half of 2005 is, however, expected to be slightly lower than the double-digit growth rates experienced in recent years."
The company said it had also registered "meaningful gains" in business banking and corporate markets, while the group said its strong cost performance in recent years had continued into the first half.
It said that while bad debt charges against consumer loans had risen as some borrowers experienced repayment difficulties, these should be offset by lower provisions against corporate loans.