SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.20549

                                    FORM 6-K

                        Report of Foreign Private Issuer
                        Pursuant to Rule 13a-16 or 15d-16
                     of the Securities Exchange Act of 1934



                                  08 March 2004


                              LLOYDS TSB GROUP plc
                 (Translation of registrant's name into English)


                                    5th Floor
                                25 Gresham Street
                                     London
                                    EC2V 7HN
                                 United Kingdom


                    (Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.

                          Form 20-F..X..Form 40-F.....


Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

                               Yes .....No ..X..

If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________



                                  Index to Exhibits

Item

No. 1         Regulatory News Service Announcement, dated 08 March 2004
              re: Final Results




                      LLOYDS TSB GROUP PLC - 2003 RESULTS

                            PRESENTATION OF RESULTS


During 2003 the Group has implemented a change in accounting policy following
the issue of new accounting guidance in Urgent Issues Task Force Abstracts 37 '
Purchases and sales of own shares' and 38 'Accounting for ESOP trusts'.  The
Group has also changed its accounting policy relating to the deferral of certain
expenses incurred in connection with the acquisition of new asset finance and
unit trust business.  These costs are now charged to the profit and loss account
as incurred, rather than over the expected life of the related transactions.
The Group has restated comparative figures to reflect these changes (page 45,
note 1).

In order to provide a clearer representation of the underlying performance of
the Group, the results of the Group's life and pensions, and general insurance
businesses include investment earnings calculated using longer-term investment
rates of return (page 48, note 5).  The difference between the normalised
investment earnings and the actual return ('the investment variance') together
with the impact of changes in the economic assumptions used in the embedded
value calculation (page 49, note 6), and the profit on the sale of a number of
overseas businesses in 2003 (page 49, note 7) have been separately analysed and
a reconciliation to the Group's profit before tax is given on page 16.


LLOYDS TSB GROUP

                                  CONTENTS


                                                                     Page
                                                                   
Performance highlights                                                  1

Group Chief Executive's statement                                       2

Summary of results                                                      6

Review of financial performance                                         7

Consolidated profit and loss account                                   11

Consolidated balance sheet                                             12

Consolidated cash flow statement                                       13

Segmental analysis                                                     14

Profit before tax by main businesses                                   16

Performance by sector                                                  17

Income                                                                 31

Operating expenses                                                     36

Credit quality                                                         39

Capital ratios                                                         41

Overview of consolidated balance sheet                                 42

Notes                                                                  45

Contacts for further information                                       52




                       FORWARD LOOKING STATEMENTS

This announcement contains forward looking statements with respect to the
business, strategy and plans of the Lloyds TSB Group, its current goals and
expectations relating to its future financial condition and performance.  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 business and equity
risk in its insurance businesses, changing demographic trends, unexpected
changes to regulation or regulatory actions, changes in customer preferences,
competition and other factors.  Please refer to the latest Annual Report on Form
20-F of Lloyds TSB Group filed with the US Securities and Exchange Commission
for a discussion of such factors.


LLOYDS TSB GROUP


                           PERFORMANCE HIGHLIGHTS

Results

-    Profit before tax increased by GBP1,730 million, or 66 per cent, to
     GBP4,348 million.

-    Profit attributable to shareholders increased by GBP1,464 million, or
     82 per cent, to GBP3,254 million.

-    Earnings per share increased by 82 per cent to 58.3p.

-    Post-tax return on average shareholders' equity 38.5 per cent.

-    Total capital ratio 11.3 per cent, tier 1 capital ratio 9.5 per cent.

-    Final dividend of 23.5p per share, making a total of 34.2p for the
     year (2002: 34.2p).


Results, excluding changes in economic assumptions, investment variance and
profit on sale of businesses

-    Profit before tax decreased by GBP126 million, or 4 per cent, to GBP3,380
     million.

-    Earnings per share decreased by 6 per cent to 41.5p.

-    Economic profit increased by 4 per cent to GBP1,553 million.

-    Post-tax return on average shareholders' equity 27.4 per cent.


Key achievements

-    A new strategic focus on organic growth has been implemented, and a
     number of non-core overseas businesses have been sold.

-    The Group has improved its market share in many key product areas,
     including credit cards,  personal loans, bank savings, and UK life and
     pensions.

-    Excluding the impact of disposals, customer lending grew by 10 per
     cent to GBP135 billion and customer deposits increased by 6 per cent to
     GBP116 billion.

-    The rate of decline in the Group's net interest margin has slowed.

-    Strict cost control has been maintained.  Excluding the impact of
     acquisitions and the customer redress provision, expenses decreased by 1
     per cent.

-    Asset quality remains strong.

-    Profit before tax from UK Retail Banking and Mortgages, excluding the
     impact of the provision for customer redress, increased by 21 per cent, as
     a result of 9 per cent growth in income and flat costs.

-    New business profitability in Scottish Widows increased by 13 per cent, as
     a result of market share growth and an improved new business margin.

-    In Wholesale and International Banking, positive results are emerging
     from the improved co-ordination between our Corporate and Financial Markets
     businesses.

-    Capital ratios significantly improved.  Scottish Widows remains on
     track to pay a 2004 dividend to Lloyds TSB.


                                  Page 1 of 52


LLOYDS TSB GROUP


                       GROUP CHIEF EXECUTIVE'S STATEMENT

Lloyds TSB's headline results in 2003 showed a 66 per cent rise in profit before
tax to GBP4,348  million,  compared to GBP2,618  million in 2002.  This increase
does not  appropriately  reflect  the Group's  performance,  as it was, in large
part, the result of the strategic  repositioning  of our business  portfolio and
the greater stability in global financial  markets.  Excluding the profit on the
sale of businesses, investment variance and changes in economic assumptions, the
Group's  profit before tax was down 4 per cent, or GBP126  million,  to GBP3,380
million.  On the same basis,  profit  before tax  increased by 3 per cent in the
second  half of 2003,  compared  to the  first  half of the year,  supported  by
improvements in each of the main business units.

When viewing the Group's trading performance for the year, a number of other
factors need to be taken into account to allow for a better understanding and
comparison with 2002.  In particular, the reduction of GBP131 million in the
Group's pension scheme related income, and the introduction of the Competition
Commission's remedies for small and medium-sized enterprises which reduced
profit before tax by GBP174 million in 2003.

Whilst it is important to recognise that these are ongoing parts of the
business, the year-on-year comparison excluding these factors shows earnings
growth, with a modest income uplift and continued tight control over expenses.
Growth in income was supported by good quality growth in customer lending and
deposits which, excluding the impact of disposals, grew by 10 per cent and 6 per
cent respectively.  The rate of decline in the Group's net interest margin has
slowed, despite intense competition within the UK financial services market, as
we improved the mix of assets.  The Group net interest margin in 2003 was 3.04
per cent, compared with 3.20 per cent in 2002, and we continue to budget for
further gradual product margin erosion.

The Group's cost performance reflected good progress in a number of efficiency
related initiatives, together with a reduction of some 1,200 in the Group's
total staffing, after allowing for the acquisition and disposal of businesses.
Provisions for bad and doubtful debts reduced by 8 per cent, as a result of
lower charges in the corporate and international businesses.  Asset quality
across the Group remains strong and total non-performing lending reduced by 14
per cent during the year, partly as a result of business disposals.  The Group's
return on equity, excluding disposal gains, investment variance and changes in
economic assumptions, was 27.4 per cent.


Management priorities

In 2003, the management team set a series of priorities to guide the Group and
provide a framework to build the franchise.  The three key themes are:

  - to actively manage the portfolio of businesses and to reduce risk and
    earnings volatility,
  - to maintain and build profitability, and,
  - to position the Group to deliver profitable growth from within our retail
    and corporate customer franchises.


                                  Page 2 of 52


LLOYDS TSB GROUP

The key achievements against these priorities are summarised below.


Managing the business portfolio

During the year, the Group reviewed the strategic options for a number of its
businesses.  The criteria used in our evaluation process were the strategic fit
with the Group and the prospects for long-term economic profit growth.  As a
result of the review, we sold The National Bank of New Zealand, substantially
all of our businesses in Brazil and our French operations. We have also
announced the sale of our Central American businesses, pending approval from the
regulatory authorities.  Our emerging markets debt portfolio, which totalled
GBP1.1 billion at the end of 2002, was also sold.  We have removed significant
earnings volatility and are now more focused on our core franchises, and are
confident the quality of our future earnings will improve.

In our life assurance business, we continue to keep close control over earnings
risk and have put plans in place to deliver capital efficient growth.

In 2003, we implemented a new risk infrastructure across all our business units
and maintained tight control over our risk positions and credit quality, which
is in part reflected in our lower charge for bad and doubtful debts and reduced
levels of non-performing lending.

We have also put in place new sales management processes and incentive plans
designed to guide the organisation to build deep, long-term customer
relationships, and to underpin our commitment to treating our customers fairly.
We are determined to avoid future lapses in our sales processes which, in the
first half of 2003, required us to raise a GBP300 million provision to provide
redress to customers.


Maintaining and building profitability

Our key financial measures of performance are economic profit growth and return
on economic equity.  During 2003, the Group delivered an economic profit
increase of 4 per cent and maintained a high post-tax return on equity,
excluding disposal gains, investment variance and changes in economic
assumptions at 27.4 per cent.

In 2003, we established an increased focus on economic capital management,
supported by the introduction of a more rigorous, Basel 2 compliant, equity
attribution model.  This has changed the way we allocate capital, and has been
reflected in the mix of our balance sheet growth during 2003.  We have seen good
growth in consumer lending and a reduction in the Group's portfolio of finer
margin loans and debt securities.  The improvement in our mix of assets has
supported an increase in the Group's net interest margin in the fourth quarter
of the year.

In line with our plans to maximise the use of our capital resources, we have
reviewed the performance of our life, pensions and investments product
portfolio.  The new business margin rose from 19.3 per cent to 21.6 per cent
whilst growing market share from 5.2 per cent to 5.7 per cent.  Scottish Widows
remains one of the most strongly capitalised life assurance companies in the UK
and is on track to pay a 2004 dividend to Lloyds TSB.  During the year Scottish
Widows' free asset ratio, a key measure of life assurance companies' financial
strength, increased to an estimated 13.5 per cent, from 12.2 per cent in 2002.


                                  Page 3 of 52


LLOYDS TSB GROUP

Cost control continues to have high priority throughout the Group.  The
increasing use of straight through processing, and our introduction of a Sigma
approach to quality, currently covering almost 30 per cent of our transactions,
has started to improve our cost effectiveness and customer service levels.  We
intend to extend this programme over the next year.  The Group has also embarked
on a programme of outsourcing a number of its processing and back office
operations.


Positioning the Group for growth

The Group's principal focus is on growth from within the franchise, and our
objective is to build valuable long-term relationships with customers in both
the retail and corporate markets.  We will however continue to review
opportunities for 'in-market' purchases, such as the successful acquisition of
Goldfish.  The Group's capital position has strengthened considerably during
2003, providing the capital flexibility to make value creating acquisitions to
support this focus on organic growth.

The emphasis on developing the core franchise has resulted in a robust
performance in UK Retail Banking and Mortgages in 2003, with profit before tax
increasing by 21 per cent as revenues increased by 9 per cent whilst costs were
held flat, excluding the customer redress provision of GBP200 million.

There has been strong balance growth in many key areas, particularly credit
cards, up 18 per cent, and personal loans, up 9 per cent, excluding the Goldfish
acquisition, retail banking current accounts, savings and investments, up 10 per
cent, and mortgages, up 13 per cent.  Over 1.8 million customers have benefited
from the roll out of enhanced relationship management offers, Premier and
Privilege, that have begun to have a positive impact on income generation and
customer loyalty.  In our mortgage business, we increased our outstanding
balances but our share of net new lending fell in the second half of 2003, given
the uneconomic nature of some products.  Product sales via the internet
distribution channel continue to grow rapidly with an average of more than
70,000 product sales per month, up 80 per cent on 2002.  This reflects the
successful development of our multi-channel distribution strategy.  Overall,
sales from direct channels amounted to nearly 40 per cent of total retail
banking sales in 2003, representing a significant increase over the prior year.

Scottish Widows has made good market share gains in the UK life and pensions
market, particularly through the Independent Financial Advisor distribution
channel, with new business contribution up by 13 per cent and the margin on new
business increasing significantly, following the focus on the distribution of
more profitable and capital efficient products.  Work is also underway to
improve the overall performance through our branch channels.  Profitability from
existing business fell largely as a result of changes in actuarial assumptions.
Our general insurance business continued to perform well with good income growth
in the home insurance market.

In Wholesale and International Banking, positive results are emerging from the
improved co-ordination between our Corporate and Financial Markets businesses.
There was an uplift in foreign exchange and interest rate management product
sales to Corporate customers in the second half of 2003, and the pipeline for
new business continues to expand.  Even after absorbing the GBP174 million
reduction in income as a result of the Competition Commission's SME ruling and
excluding the GBP865 million profit on sale of businesses, profit before tax in
Wholesale and International Banking grew 5 per cent during 2003.


                                  Page 4 of 52


LLOYDS TSB GROUP

Looking forward

During 2003 we have made good progress both strategically and financially.  We
have brought a sharper focus on maintaining and building profitability and we
are beginning to deliver growth in our substantial retail and corporate customer
franchises.  We remain confident of delivering further improved performance by
the second half of 2004.

Finally, I would like to extend my thanks to our staff for their commitment and
support and, in particular, their desire to serve our customers.  The positive
way in which they have embraced the change programme lends further confidence to
my belief that we will grow our business in line with our expectations.

J Eric Daniels
Group Chief Executive


                                  Page 5 of 52



LLOYDS TSB GROUP

SUMMARY OF RESULTS


                                                                                                          Increase
                                                                             2003            2002*      (Decrease)
Results - statutory                                                          GBPm            GBPm                %
                                                                                                      
Total income                                                                9,908           8,887               11
Operating expenses                                                          5,173           4,913                5
Trading surplus                                                             4,735           3,974               19
Provisions for bad and doubtful debts                                         950           1,029               (8)
Profit before tax                                                           4,348           2,618               66
Profit attributable to shareholders                                         3,254           1,790               82
Economic profit (page 47, note 2)                                           2,493             830              200
Earnings per share (pence)                                                   58.3            32.1               82
Post-tax return on average shareholders' equity (%)                          38.5            16.8

Results, excluding changes in economic assumptions,
investment variance and profit on sale of businesses (page 16)

Profit before tax                                                           3,380           3,506               (4)
Economic profit                                                             1,553           1,500                4
Earnings per share (pence)                                                   41.5            44.2               (6)
Post-tax return on average shareholders' equity (%)                          27.4            23.1

Shareholder value
Closing market price per share (year-end)                                    448p            446p
Total market value of shareholders' equity                              GBP25.1bn       GBP24.8bn
Dividends per share                                                         34.2p           34.2p                -

Balance sheet                                                                GBPm            GBPm
Shareholders' equity                                                        9,624           7,943               21
Net assets per share (pence)                                                  170             140               21
Total assets                                                              252,012         252,561                -
Loans and advances to customers                                           135,251         134,474                1
Customer deposits                                                         116,496         116,334                -

Risk asset ratios                                                               %               %
Total capital                                                                11.3             9.6
Tier 1 capital                                                                9.5             7.7
*restated (page 45, note 1)



                                  Page 6 of 52


LLOYDS TSB GROUP


                         REVIEW OF FINANCIAL PERFORMANCE

In 2003 the Group's performance was significantly affected by the profit on sale
of a number of  overseas  businesses  and the  absence of a negative  investment
variance.  As a result,  profit  before tax on a statutory  basis  increased  by
GBP1,730 million, or 66 per cent, to GBP4,348 million,  from GBP2,618 million in
2002.  Total income increased by GBP1,021  million,  or 11 per cent, to GBP9,908
million whilst operating  expenses  increased by GBP260 million,  or 5 per cent.
Profit  attributable to shareholders  was 82 per cent higher at GBP3,254 million
and earnings per share increased by 82 per cent to 58.3p.  Shareholders'  equity
increased by GBP1,681 million to GBP9,624 million,  from GBP7,943 million at the
end of 2002. The post-tax  return on average  shareholders'  equity was 38.5 per
cent,  compared to 16.8 per cent in 2002, and economic  profit  increased by 200
per cent to GBP2,493 million. The post-tax return on average assets was 1.57 per
cent, and the post-tax return on average risk-weighted assets was 2.63 per cent.

To enable meaningful comparisons to 2002 to be made it is appropriate to exclude
the  gains  on  business  disposals,  which  totalled  GBP865  million  in 2003,
investment  variances,  which  totalled a negative  GBP943  million in 2002, and
changes in economic  assumptions in the Group's life assurance  businesses (page
16).  On this  basis,  profit  before  tax  decreased  by 4 per cent,  or GBP126
million,  to GBP3,380 million. A number of other significant issues affected the
Group's   results   in  2003   including,   particularly,   the  impact  of  the
implementation of remedies required by the UK Competition  Commission  following
its investigation  into the supply of banking services to small and medium sized
enterprises,  which reduced  profit before tax by GBP174  million in 2003, and a
reduction of GBP131  million in the Group's FRS17 related other finance  income,
partly  reflecting  the fall,  in 2002,  in the  value of assets in the  Group's
pension schemes.

In many key product  areas the Group  continued  to grow  market  share and as a
result,  adjusting for the impact of disposals over the last 12 months, customer
lending grew by GBP12.1  billion,  or 10 per cent, to GBP135  billion,  of which
GBP1 billion represented the Goldfish lending portfolios acquired,  and customer
deposits  increased  by 6 per cent to GBP116  billion.  The  Group net  interest
margin  was  3.04  per  cent,   compared  with  3.20  per  cent  in  2002.   The
implementation  of the remedies  required by the  Competition  Commission's  SME
report reduced the Group's net interest  margin in 2003 by some 10 basis points.
The strong  growth in lending and deposit  volumes,  however,  ensured that this
reduction  in the Group net  interest  margin was more than  compensated  for by
volume growth,  resulting in overall growth in net interest income of 2 per cent
compared with 2002.

Pre-tax profit from UK Retail Banking and Mortgages  increased by GBP13 million,
or 1 per cent, to GBP1,021  million,  compared  with  GBP1,008  million in 2002.
Excluding  the  GBP200  million  provision  for  customer  redress  taken at the
half-year,  pre-tax  profit from UK Retail  Banking and  Mortgages  increased by
GBP213 million, or 21 per cent, to GBP1,221 million.  There was strong growth in
credit card balances, up 18 per cent, and in personal loan balances outstanding,
up 9 per cent,  excluding the impact of the acquisition of the Goldfish  lending
portfolios in September 2003. Current account and savings and investment account
balances,  within  Retail  Banking,  increased  by 10 per cent.  Costs  remained
tightly controlled and asset quality generally remains satisfactory.  Provisions
for bad and doubtful debts increased by GBP98 million, or 20 per cent, to GBP594
million, largely as a result of volume related asset growth in the personal loan
and  credit  card  portfolios,  and a higher  charge  for fraud in the  personal
lending portfolios.


                                  Page 7 of 52


LLOYDS TSB GROUP

In the  Mortgages  business,  gross new  lending  increased  by 27 per cent to a
record GBP24.2  billion,  compared with GBP19.0 billion in 2002. Net new lending
was a record GBP8.3 billion,  compared with GBP5.9 billion in 2002, resulting in
a market  share of net new  lending of 8.6 per cent.  As a result of this strong
growth  in both  gross  and  net  new  lending,  mortgage  balances  outstanding
increased  by 13  per  cent  to  GBP70.8  billion,  during  2003.  Cheltenham  &
Gloucester  (C&G)  has  continued  its  policy  of not  exceeding  a 95 per cent
loan-to-value  ratio on new lending and the average  loan-to-value  ratio of C&G
mortgage  business  written  during  2003 was 64 per cent  (2002:  67 per cent).
During 2003, 69 per cent of new lending was written at a loan-to-value  below 80
per cent.  C&G has minimal  exposure  to the  sub-prime  and  self-certification
mortgage markets.

Profit before tax from Insurance and Investments decreased by GBP136 million, or
11 per cent, to GBP1,094  million.  Excluding  changes in economic  assumptions,
investment  variance and provisions for customer  redress,  pre-tax profits from
Insurance  and  Investments  decreased  by GBP241  million,  or 17 per cent,  to
GBP1,194  million,  largely  as a result of a  reduction  of GBP168  million  in
benefits from  experience  variances and  assumption  changes,  and reduction of
GBP61 million in normalised investment earnings.  New business income,  however,
increased by GBP59 million,  or 15 per cent, to GBP457 million and the margin on
new business  increased to 21.6 per cent,  from 19.3 per cent in 2002.  Overall,
weighted sales in the Group's life,  pensions and unit trust  businesses in 2003
were GBP733.4  million,  compared to GBP767.6 million last year, a decrease of 4
per cent. The overall UK market for life,  pensions and unit trusts  declined by
11 per cent in 2003.  Against this backdrop,  the Group's market share of the UK
life,  pensions and long-term  savings market increased from 5.2 per cent to 5.7
per cent during the year. In the Group's general insurance operations, continued
strong growth in household insurance  revenues,  which increased by 12 per cent,
was offset by a 15 per cent reduction in creditor insurance revenues.

Wholesale and International  Banking pre-tax profit increased by GBP931 million,
to GBP2,195 million, largely reflecting the GBP865 million profit on disposal of
a number of overseas businesses. In Wholesale, the impact of the introduction of
the Competition  Commission's  SME report remedies and lower income in Financial
Markets  was more than  offset by strong  profit  growth in asset  finance and a
reduction in provisions for bad and doubtful debts. This led to an increase of 1
per cent in profit before tax from GBP883  million in 2002 to GBP890  million in
2003. In International Banking, profit before tax increased by GBP924 million to
GBP1,305 million, largely as a result of the GBP865 million of overseas business
disposal profits,  and a lower provisions charge in Argentina.  During the year,
the  Group  decided  to sell  The  National  Bank of New  Zealand  as we did not
consider the outlook for its  profitable  growth to be as positive,  without the
benefit  of cost  synergies,  as that  achieved  in  recent  years.  The sale to
Australia and New Zealand Banking Group,  who already own banking  operations in
New Zealand and are therefore better  positioned to achieve cost synergies,  was
the value maximising strategy for our shareholders.

Growth in customer  lending and the impact of  acquisitions in the asset finance
business was more than offset by the  Competition  Commission SME report impact,
leading to a GBP3 million  decrease in total income.  The provisions  charge for
bad and doubtful debts decreased by GBP171 million,  despite a small increase in
provisions within the asset finance businesses  reflecting  portfolio growth. In
2002,  provisions against Group loans and advances to certain large US corporate
customers totalled some GBP100 million, and there was a GBP79 million reduction,
compared to 2002, in the new provisions required against the Group's exposure in
Argentina.


                                  Page 8 of 52


LLOYDS TSB GROUP

The total Group charge for bad and doubtful debts was 8 per cent lower at GBP950
million,  compared with  GBP1,029  million in 2002.  In UK Retail  Banking,  the
provisions  charge  increased  by  GBP115  million,  or 23 per  cent,  to GBP612
million, largely as a result of volume related asset growth in the personal loan
and credit card  portfolios,  but also as a result of a higher charge for fraud.
In Mortgages,  an improved arrears  position and the beneficial  effect of house
price increases resulted in an GBP18 million provisions release for the year. In
Wholesale,  the provisions  charge decreased by GBP78 million to GBP300 million.
International Banking provisions decreased to GBP69 million, from GBP162 million
in 2002,  as a result of the  reduction  in  provisions  relating to the Group's
exposure to Argentina.  The Group's charge for bad and doubtful debts, expressed
as a percentage of average lending, was 0.66 per cent, compared to 0.77 per cent
in 2002.  Non-performing  lending  decreased by 14 per cent to GBP1,218 million,
reflecting the impact of business  disposals and lower levels of  non-performing
lending in the Group's corporate portfolio.

During 2003 the Group accelerated the sale of its portfolio of emerging markets
debt investments to take full advantage of improving secondary bond market
conditions, and to reduce future earnings volatility.  Profits on bond sales,
and certain closed foreign exchange positions, in 2003 totalled some GBP295
million.  The emerging markets debt portfolio has now been completely sold and,
as a result, the Group will not achieve any further contribution from the
portfolio in 2004 and beyond.

The Group has completed, in conjunction with the regulator, an investigation
into the appropriateness of certain sales of the Extra Income & Growth Plan, a
stock market related investment product sold in 2000 and 2001.  During 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 customer redress in respect of past
product sales, the adequacy of these provisions was reviewed in the light of
ongoing experience and the completion of the Extra Income & Growth Plan
investigation.  As a result, the estimated total cost of redress is forecast to
increase by some GBP300 million, largely reflecting sales of endowment based and
long-term savings products, and a provision of this amount was made during the
first half of the year.  The Group still considers this provision to be adequate
and will continue to keep it under review.

At the end of 2003, the total capital ratio was 11.3 per cent (2002: 9.6 per
cent) and the tier 1 capital ratio was 9.5 per cent (2002: 7.7 per cent).
Risk-weighted assets decreased by 4 per cent to GBP117.7 billion, from GBP122.4
billion at the end of 2002, reflecting the impact of business disposals.  At the
end of 2003, the Scottish Widows free asset ratio was an estimated 13.5 per
cent, compared to 12.2 per cent at the end of 2002 (page 50, note 8).  The
equity content in both Scottish Widows' with-profits fund and shareholder owned
estate has been reduced, and the Group has further improved its protection
against short-term volatility in equity markets by hedging part of its equity
portfolio.  The equity backing ratio for traditional with-profits policies at 31
December 2003 was 49 per cent (equities 38 per cent; property 11 per cent).
Scottish Widows remains one of the most strongly capitalised life assurance
companies in the UK, and we are also satisfied with Scottish Widows' overall
capital position calculated using the Financial Services Authority's new '
realistic' basis of balance sheet reporting.  On a market consistent basis, we
estimate a 'realistic' surplus within the long-term fund of Scottish Widows
which is more than three times the risk capital margin.  The Group has not
injected additional capital from outside the Group's insurance businesses into
Scottish Widows, and does not expect to inject capital into Scottish Widows
unless the level of the FTSE 100 index were to fall to, and remain, below 3,000.
Scottish Widows remains on track to pay a 2004 dividend to Lloyds TSB.


                                  Page 9 of 52


LLOYDS TSB GROUP

Lloyds TSB's capital ratios improved significantly during 2003, partly as a
result of gains on business disposals, and the Group continues to generate
strong cash flows from its banking operations.  Lloyds TSB remains one of the
most profitable major banks in the world and is one of only two large
commercially owned banks in the world, and the only UK bank, to have a 'triple
A' rating from Moody's.

The Group's capital management policy is focused on optimising value for
shareholders.  There is a clear focus on delivering organic growth and expected
capital retentions are sufficient to support planned levels of growth.  However,
we also wish to maintain the flexibility to make value enhancing 'in market'
acquisitions such as the recent acquisitions of the Goldfish credit card and
personal loan businesses, asset finance businesses and Chartered Trust.  At this
stage, therefore, the Board has decided not to implement a share buyback
programme but will, of course, continue to keep all options for the utilisation
of capital under review.

The Board has decided to maintain the final dividend at 23.5p per share to make
a total for the year of 34.2p (2002: 34.2p).  The Board continues to recognise
the importance attached by shareholders to the Group's dividend which in 2003
represented a dividend yield of 7.6 per cent, calculated using the 31 December
2003 share price of 448p.


                                 Page 10 of 52


LLOYDS TSB GROUP

                                CONSOLIDATED PROFIT AND LOSS ACCOUNT



                                                                                       2003+                 2002*
                                                                                        GBPm                  GBPm
                                                                                                        
Interest receivable:
  Interest receivable and similar income arising from
  debt securities                                                                        452                   567
  Other interest receivable and similar income                                         9,697                 9,982
Interest payable                                                                       4,894                 5,378
Net interest income                                                                    5,255                 5,171
Other finance income                                                                      34                   165
Other income
Fees and commissions receivable                                                        3,099                 3,053
Fees and commissions payable                                                            (722)                 (645)
Dealing profits (before expenses)                                                        560                   188
Income from long-term assurance business                                                 453                  (294)
General insurance premium income                                                         535                   486
Other operating income                                                                   694                   763
                                                                                       4,619                 3,551
Total income                                                                           9,908                 8,887
Operating expenses

Administrative expenses                                                                4,476                 4,212
Depreciation                                                                             646                   642
Amortisation of goodwill                                                                  51                    59
Depreciation and amortisation                                                            697                   701
Total operating expenses                                                               5,173                 4,913
Trading surplus                                                                        4,735                 3,974
General insurance claims                                                                 236                   229
Provisions for bad and doubtful debts
Specific                                                                                 946                   965
General                                                                                    4                    64
                                                                                         950                 1,029
Amounts written off fixed asset investments                                               44                    87
Operating profit                                                                       3,505                 2,629

Share of results of joint ventures                                                       (22)                  (11)
Profit on sale of businesses                                                             865                     -
Profit on ordinary activities before tax                                               4,348                 2,618

Tax on profit on ordinary activities                                                   1,025                   766
Profit on ordinary activities after tax                                                3,323                 1,852
Minority interests   - equity                                                             22                    19
                     - non-equity                                                         47                    43
Profit for the year attributable to shareholders                                       3,254                 1,790

Dividends                                                                              1,911                 1,908
Profit (loss) for the year                                                             1,343                  (118)


Earnings per share                                                                     58.3p                 32.1p
Diluted earnings per share                                                             58.1p                 32.0p



*restated (page 45, note 1)
+an analysis of the 2003 results between continuing operations and discontinued
operations is set out on page 46.


                                 Page 11 of 52


LLOYDS TSB GROUP

                                           CONSOLIDATED BALANCE SHEET


                                                                                   31 December          31 December
                                                                                          2003                2002*
                                                                                          GBPm                 GBPm
                                                                                                          
Assets
Cash and balances at central banks                                                       1,195                1,140
Items in course of collection from banks                                                 1,447                1,757
Treasury bills and other eligible bills                                                    539                2,409
Loans and advances to banks                                                             15,547               17,529
Loans and advances to customers                                                        135,251              134,474
Debt securities                                                                         28,669               29,314
Equity shares                                                                              458                  206
Interests in joint ventures                                                                 54                   45
Intangible assets                                                                        2,513                2,634
Tangible fixed assets                                                                    3,918                4,096
Other assets                                                                             3,944                5,239
Prepayments and accrued income                                                           1,918                2,287
Long-term assurance business attributable to the shareholder                             6,481                6,213
                                                                                       201,934              207,343
Long-term assurance assets attributable to policyholders                                50,078               45,218
Total assets                                                                           252,012              252,561

Liabilities
Deposits by banks                                                                       23,955               25,443
Customer accounts                                                                      116,496              116,334
Items in course of transmission to banks                                                   626                  775
Debt securities in issue                                                                25,922               30,255
Other liabilities                                                                        7,007                8,284
Accruals and deferred income                                                             3,206                3,659
Post-retirement benefit liability                                                        2,139                2,077
Provisions for liabilities and charges:
  Deferred tax                                                                           1,376                1,313
  Other provisions for liabilities and charges                                             402                  361
Subordinated liabilities:
  Undated loan capital                                                                   5,959                5,496
  Dated loan capital                                                                     4,495                4,672
Minority interests:
  Equity                                                                                    44                   37
  Non-equity                                                                               683                  694
                                                                                           727                  731
Called-up share capital                                                                  1,418                1,416
Share premium account                                                                    1,136                1,093
Merger reserve                                                                             343                  343
Profit and loss account                                                                  6,727                5,091
Shareholders' funds (equity)                                                             9,624                7,943
                                                                                       201,934              207,343
Long-term assurance liabilities to policyholders                                        50,078               45,218
Total liabilities                                                                      252,012              252,561

*restated (page 45, note 1)




                                 Page 12 of 52


LLOYDS TSB GROUP

                                      CONSOLIDATED CASH FLOW STATEMENT



                                                                                             2003              2002
                                                                                             GBPm              GBPm
                                                                                                         
Net cash inflow from operating activities                                                     772             5,394
Dividends received from associated undertakings                                                 5                 2
Returns on investments and servicing of finance:
  Dividends paid to equity minority interests                                                 (14)              (18)
  Payments made to non-equity minority interests                                              (81)              (43)
  Interest paid on subordinated liabilities (loan capital)                                   (600)             (463)
Net cash outflow from returns on investments and servicing of finance                        (695)             (524)

Taxation:
  UK corporation tax                                                                         (598)             (758)
  Overseas tax                                                                               (186)             (193)
Total taxation                                                                               (784)             (951)

Capital expenditure and financial investment:
  Additions to fixed asset investments                                                    (35,420)          (46,830)
  Disposals of fixed asset investments                                                     36,281            45,507
  Additions to tangible fixed assets                                                         (778)           (1,315)
  Disposals of tangible fixed assets                                                          287               359
  Capital injection to life fund                                                                -              (140)
Net cash inflow (outflow) from capital expenditure
and financial investment                                                                      370            (2,419)

Acquisitions and disposals:
  Additions to interests in joint ventures                                                    (12)              (21)
  Acquisition of group undertakings and businesses                                         (1,106)             (117)
  Disposal of group undertakings and businesses                                             2,382                 -
Net cash inflow (outflow) from acquisitions and disposals                                   1,264              (138)
Equity dividends paid                                                                      (1,908)           (1,903)
Net cash outflow before financing                                                            (976)             (539)

Financing:
  Issue of subordinated liabilities (loan capital)                                            533             2,120
  Cash proceeds from issue of ordinary share capital and sale
  of own shares held in respect of employee share schemes                                      32                77
  Repayments of subordinated liabilities (loan capital)                                       (75)              (55)
  Minority investment in subsidiaries                                                           -               167
  Capital element of finance lease rental payments                                             (1)               (4)
Net cash inflow from financing                                                                489             2,305
(Decrease) increase in cash                                                                  (487)            1,766



                                 Page 13 of 52


LLOYDS TSB GROUP

                                              SEGMENTAL ANALYSIS



                                          UK Retail
Year ended                                  Banking                   Wholesale and
31 December 2003                                and   Insurance and   International           Central
                                          Mortgages     Investments         Banking       group items            Total
                                               GBPm            GBPm            GBPm              GBPm             GBPm
                                                                                                   
Net interest income                           3,137              81           2,387              (350)           5,255
Other finance income                              -               -               -                34               34
Other income                                    909           1,653           1,656               298            4,516
Total income                                  4,046           1,734           4,043               (18)           9,805
Operating expenses                            2,409             404           2,300                60            5,173
Trading surplus (deficit)                     1,637           1,330           1,743               (78)           4,632
General insurance claims                          -             236               -                 -              236
Bad debt provisions                             594               -             369               (13)             950
Amounts written off
fixed asset investments                           -               -              44                 -               44
Share of results of joint ventures              (22)              -               -                 -              (22)
Profit (loss) before tax*                     1,021           1,094           1,330               (65)           3,380
Profit on sale of businesses                      -               -             865                 -              865
Changes in economic
assumptions                                       -             (22)              -                 -              (22)
Investment variance                               -             125               -                 -              125
Profit (loss) before tax                      1,021           1,197           2,195               (65)           4,348


                                          UK Retail
Year ended                                 Banking                      Wholesale and
31 December 2002+                              and    Insurance and     International          Central
                                         Mortgages      Investments           Banking      group items            Total
                                              GBPm             GBPm              GBPm             GBPm             GBPm

Net interest income                          2,890               74             2,458             (251)           5,171
Other finance income                             -                -                 -              165              165
Other income                                   837            1,865             1,588              149            4,439
Total income                                 3,727            1,939             4,046               63            9,775
Operating expenses                           2,212              480             2,185               36            4,913
Trading surplus                              1,515            1,459             1,861               27            4,862
General insurance claims                         -              229                 -                -              229
Bad debt provisions                            496                -               540               (7)           1,029
Amounts written off
fixed asset investments                          -                -                57               30               87
Share of results of joint ventures             (11)               -                 -                -              (11)
Profit before tax*                           1,008            1,230             1,264                4            3,506
Changes in economic
assumptions                                      -               55                 -                -               55
Investment variance                              -             (943)                -                -             (943)
Profit before tax                            1,008              342             1,264                4            2,618



*excluding profit on sale of businesses, changes in economic assumptions and
investment variance
+restated (see page 16)


                                 Page 14 of 52


LLOYDS TSB GROUP

                                     SEGMENTAL ANALYSIS BY HALF-YEAR (unaudited)



                                          UK Retail
Half-year ended                             Banking                   Wholesale and
30 June 2003+                                   and   Insurance and   International           Central
                                          Mortgages     Investments         Banking       group items            Total
                                               GBPm            GBPm            GBPm              GBPm             GBPm
                                                                                                   
Net interest income                           1,515              39           1,184              (167)           2,571
Other finance income                              -               -               -                17               17
Other income                                    440             771             816               288            2,315
Total income                                  1,955             810           2,000               138            4,903
Operating expenses                            1,256             211           1,129                31            2,627
Trading surplus                                 699             599             871               107            2,276
General insurance claims                          -             108               -                 -              108
Bad debt provisions                             298               -             185               (13)             470
Amounts written off
fixed asset investments                           -               -              24                 -               24
Share of results of joint ventures              (11)              -               -                 -              (11)
Profit before tax*                              390             491             662               120            1,663
Loss on sale of businesses                        -               -             (15)                -              (15)
Changes in economic
assumptions                                       -              (8)              -                 -               (8)
Investment variance                               -              42               -                 -               42
Profit before tax                               390             525             647               120            1,682


Half-year ended                            Banking                      Wholesale and
31 December 2003                               and    Insurance and     International          Central
                                         Mortgages      Investments           Banking      group items            Total
                                              GBPm             GBPm              GBPm             GBPm             GBPm

Net interest income                          1,622               42             1,203             (183)           2,684
Other finance income                             -                -                 -               17               17
Other income                                   469              882               840               10            2,201
Total income                                 2,091              924             2,043             (156)           4,902
Operating expenses                           1,153              193             1,171               29            2,546
Trading surplus (deficit)                      938              731               872             (185)           2,356
General insurance claims                         -              128                 -                -              128
Bad debt provisions                            296                -               184                -              480
Amounts written off
fixed asset investments                          -                -                20                -               20
Share of results of joint ventures             (11)               -                 -                -              (11)
Profit (loss) before tax*                      631              603               668             (185)           1,717
Profit on sale of businesses                     -                -               880                -              880
Changes in economic
assumptions                                      -              (14)                -                -              (14)
Investment variance                              -               83                 -                -               83
Profit (loss) before tax                       631              672             1,548             (185)           2,666



*excluding profit on sale of businesses, changes in economic assumptions and
investment variance
+restated (see page 16)


                                 Page 15 of 52


LLOYDS TSB GROUP

                                      PROFIT BEFORE TAX BY MAIN BUSINESSES


                                                                                                           Increase
                                                                              2003            2002       (Decrease)
                                                                              GBPm            GBPm                %
                                                                                                       
UK Retail Banking and Mortgages
  Before provisions for customer redress                                     1,221           1,008               21
  Provisions for customer redress                                             (200)              -
                                                                             1,021           1,008                1
Insurance and Investments
  Before provisions for customer redress                                     1,194           1,435              (17)
  Provisions for customer redress                                             (100)           (205)
                                                                             1,094           1,230              (11)
Wholesale and International Banking                                          1,330           1,264                5
Central group items                                                            (65)              4
Profit before tax, excluding changes in economic
assumptions, investment variance and profit on
sale of businesses                                                           3,380           3,506               (4)
Changes in economic assumptions (page 49, note 6)                              (22)             55
Investment variance (page 48, note 5)                                          125            (943)
Profit on sale of businesses (page 49, note 7)                                 865               -
Profit before tax                                                            4,348           2,618               66



2002 figures have been restated to reflect a change in accounting policy
following the issue of new accounting guidance in Urgent Issues Task Force
Abstracts 37 'Purchases and sales of own shares' and 38 'Accounting for ESOP
trusts', the reclassification of Business Banking earnings from UK Retail
Banking and Mortgages to Wholesale and International Banking, and changes in
internal transfer pricing arrangements.  The Group has also changed its
accounting policy relating to the deferral of certain expenses incurred in
connection with the acquisition of new asset finance and unit trust business.
These costs are now charged to the profit and loss account as incurred, rather
than over the expected life of the related transactions.


                                    YEAR END ASSETS BY MAIN BUSINESSES



                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                         
UK Retail Banking and Mortgages                                                              90,272          79,629
Insurance and Investments*                                                                    9,844           9,127
Wholesale and International Banking                                                         101,555         117,066
Central group items                                                                             263           1,521
Total assets*                                                                               201,934         207,343


*excluding long-term assurance assets attributable to policyholders



                                 Page 16 of 52


LLOYDS TSB GROUP

                              PERFORMANCE BY SECTOR


UK Retail Banking and Mortgages

(covering the Group's UK retail businesses, providing banking and financial
services to personal customers; mortgages; private banking and stockbroking)



                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                         
Net interest income                                                                           3,137           2,890
Other income                                                                                    909             837
Total income                                                                                  4,046           3,727
Operating expenses:
  Before provisions for customer redress                                                      2,209           2,212
  Provisions for customer redress                                                               200               -
                                                                                              2,409           2,212
Trading surplus                                                                               1,637           1,515
Provisions for bad and doubtful debts                                                           594             496
Share of results of joint ventures                                                              (22)            (11)
Profit before tax                                                                             1,021           1,008

Profit before tax, before provisions for customer redress                                     1,221           1,008

Efficiency ratio, before provisions for customer redress                                      54.6%           59.4%
Total assets (year-end)                                                                   GBP90.3bn       GBP79.6bn
Total risk-weighted assets (year-end)                                                     GBP53.8bn       GBP48.4bn



Profit  before  tax from UK Retail  Banking  and  Mortgages  increased  by GBP13
million,  or 1 per cent, to GBP1,021  million,  compared to GBP1,008  million in
2002.  Continued  strong  growth in the  Group's  consumer  lending  portfolios,
particularly  mortgages and credit  cards,  higher  current and savings  account
credit  balances,  and a strict focus on cost control,  was largely  offset by a
GBP200  million  provision  for customer  redress.  Excluding  the impact of the
provision for customer  redress,  profit  before tax from UK Retail  Banking and
Mortgages  increased by 21 per cent,  as a result of 9 per cent growth in income
and flat costs.

Total income  increased by GBP319 million,  or 9 per cent, to GBP4,046  million.
Net interest  income  increased by GBP247  million,  or 9 per cent,  to GBP3,137
million,  as a result of strong growth in customer deposits and consumer credit.
Excluding the impact of the Goldfish acquisition,  personal loan and credit card
balances  outstanding  increased by 9 per cent and 18 per cent respectively and,
within Retail Banking,  balances on current  accounts and savings and investment
accounts  grew by 10 per  cent.  Over  the  last 12  months,  mortgage  balances
outstanding increased by 13 per cent to GBP70.8 billion.  Other income increased
by GBP72 million to GBP909  million.  There was an  improvement in income earned
from credit and debit  cards,  and  increased  income  from added value  current
accounts,  but this was partly offset by a higher level of fees and  commissions
payable.

                                 Page 17 of 52


LLOYDS TSB GROUP


UK Retail Banking and Mortgages (continued)

Operating  expenses  were  GBP197  million,  or 9 per cent,  higher at  GBP2,409
million,  compared to GBP2,212 million in 2002 largely as a result of the GBP200
million  provision  for customer  redress.  Excluding the provision for customer
redress,  operating expenses  decreased by GBP3 million to GBP2,209 million.  On
the same basis,  the efficiency  ratio improved to 54.6 per cent,  from 59.4 per
cent last year.

Bad debt provisions  increased by GBP98 million to GBP594  million,  mainly as a
result of volume  related  asset growth in personal loan and credit card lending
and a higher charge for fraud in the personal lending portfolio.  The provisions
charge as a  percentage  of average  lending for personal  loans and  overdrafts
increased to 4.25 per cent, from 3.73 per cent in 2002,  while the charge in the
credit card portfolio decreased to 3.19 per cent, from 3.52 per cent in 2002. In
Mortgages,  there was a net provision  release of GBP18  million.  Overall,  the
provisions charge as a percentage of average lending was 0.72 per cent, compared
to 0.68 per cent in 2002. In the second half of 2003, the provisions charge as a
percentage of average  lending  improved to 0.69 per cent,  compared to 0.76 per
cent in the first half of 2003.



                                                                                               2003            2002
Provisions for bad and doubtful debts by product                                               GBPm            GBPm
                                                                                                         
Personal loans/overdrafts                                                                       430             344
Credit cards                                                                                    182             153
Mortgages                                                                                       (18)             (1)
                                                                                                594             496

Charge as a percentage of average lending                                                         %               %
Personal loans/overdrafts                                                                      4.25            3.73
Credit cards                                                                                   3.19            3.52
Mortgages                                                                                     (0.03)           0.00



The UK Retail Banking strategy is to deliver organic growth by leveraging the
Group's distribution and customer knowledge capabilities.  A key focus is to
develop valuable long-term relationships with our customers.  The Group has been
achieving this by acquiring and retaining higher value customers, by developing
tailored offers for key customer segments, and by deepening relationships
through the use of our customer relationship management capabilities.  In
addition the Group is introducing greater profit accountability in distribution
channels and local markets.  The implementation of the new strategy is proving
successful and, excluding provisions for customer redress, both income and
profit per customer continue to increase reflecting our focus on building
valuable long-term relationships.  Day-to-day costs remain tightly controlled.
During 2003 we announced the establishment of an operational centre in India,
and exploratory work also continues to assess the scope of outsourcing and
offshoring opportunities to further improve central processing efficiencies.
Minimising risk is critical to the overall strategy and a range of initiatives
have now commenced, including the implementation of balanced scorecards, which
encourage behaviours that focus activity on generating value for the bank and
our customers across a broad range of measures.


                                 Page 18 of 52


LLOYDS TSB GROUP

UK Retail Banking and Mortgages (continued)

Our multi-channel distribution, comprising a network of over 2,000 branches, one
of the largest telephone banking operations in the UK, and www.lloydstsb.com,
our internet banking service, one of the most visited financial websites in
Europe, offers extensive customer choice.  In 2003 we have continued to invest
in meeting the needs of our customers by providing greater accessibility and
personalised service through all our distribution channels.  We have increased
substantially the number of branches open on Saturday, the number of
relationship managers to support our key customer segments, the range of
services offered through internet banking, and increased availability of our
telephony service outside normal working hours.

This increased investment in our direct channels has led to a significant growth
in customer usage.  In 2003 some 260 million transactions were processed through
internet banking.  Product sales through the internet channel continue to grow
rapidly with an average of more than 70,000 product sales per month, an increase
of 80 per cent on 2002.  In addition, the usage of our telephony channel
increased by 29 per cent over the year.  Sales from direct channels represented
nearly 40 per cent of total sales in 2003.

Credit cards, supported by the launch of a number of segmented, competitive and
innovative product offers including the createcard and the premier credit card,
achieved strong growth both in new accounts and balances outstanding.
Cardholder acquisition is focused on prime borrowers and mass affluent
customers, utilising a number of brands to appeal to a larger potential market
through a broad range of distribution channels.  Our market leading on-line
capabilities utilise our customer data to provide product offers at a customer
level.  Market share grew to 12.6 per cent.  In September 2003, the Group
acquired the credit card and personal loan businesses of Goldfish Bank, the
assets of which amounted to some GBP1.0 billion.

The launch of the Group's 'Plus' range of interest-bearing current accounts has
supported the retention of high quality customers within the retail banking
franchise, as well as positioning the Group to attract new-to-brand customers
through a competitively priced offer, reflecting the use of a lower cost
distribution channel.  Lloyds TSB has maintained its clear market leadership in
the added value current account market with over 4 million customers.  Rates of
customer attrition have fallen by some 17 per cent, reflecting improved levels
of customer satisfaction and the Group's improved range of segmented and
targeted offers in the personal market. Extensive work continues, to improve
levels of service and customer satisfaction, with a focus on continuous
performance improvement and innovation to meet customer needs and expectations.

The Group has also launched Lloyds TSB branded energy and home telephone
products.  By leveraging the strategic advantages offered by the Lloyds TSB
customer base, distribution strength and brand, the provision of Lloyds TSB
branded gas, electricity and home telephone services adds value to existing
customer relationships, and provides an opportunity for the Group to build new
sustainable revenue streams.  Customers purchased over 100,000 products under
this offer in 2003.


                                 Page 19 of 52


LLOYDS TSB GROUP

UK Retail Banking and Mortgages (continued)

Building on a successful 2003, Lloyds TSB continues to be well positioned in the
attractive UK wealth management market, with a range of segmented offers.
During 2003 the Group increased its wealth management customers by 45 per cent
to some 55,000, largely reflecting the March 2003 launch of Premier Banking.
Within the Lloyds TSB customer franchise are approximately 450,000 customers who
are eligible for wealth management services, representing an estimated 20 per
cent of the UK wealth management market.  Entry level for these offers starts
with Premier Banking which provides a tailored service and product offering to
mass affluent customers.



Mortgages                                                                                       2003            2002
                                                                                                          
Gross new mortgage lending                                                                 GBP24.2bn       GBP19.0bn
Market share of gross new mortgage lending                                                      8.9%            8.7%
Net new mortgage lending                                                                    GBP8.3bn        GBP5.9bn
Market share of net new mortgage lending                                                        8.6%            7.5%
Mortgages outstanding (year-end)                                                           GBP70.8bn       GBP62.5bn
Market share of mortgages outstanding                                                           9.2%            9.3%



Gross new mortgage lending increased by 27 per cent to a record GBP24.2 billion,
compared  with  GBP19.0  billion in 2002.  Net new lending  increased  to GBP8.3
billion resulting in a market share of net new lending of 8.6 per cent. Over the
last twelve months,  mortgage balances  outstanding  increased by 13 per cent to
GBP70.8 billion.

The Group continues to be one of the most efficient mortgage providers in the UK
and Cheltenham & Gloucester's (C&G) total costs as a percentage of mortgage
assets were 0.5 per cent in 2003.  C&G continues to benefit from mortgage sales
distribution through the Lloyds TSB branch network, the IFA market and from the
strength of the C&G brand.  During 2003, C&G received a 5-star service award
from the Association of Independent Financial Advisors for the ninth consecutive
year, an achievement unmatched by any UK financial services provider.

Asset quality remains strong.  The average indexed loan-to-value ratio on the C&
G mortgage portfolio was 43 per cent (2002: 46 per cent), and the average
loan-to-value ratio for C&G mortgage business written during 2003 was 64 per
cent (2002: 67 per cent).  C&G has continued its policy of not exceeding a 95
per cent loan-to-value ratio on new lending, and has minimal exposure to the
sub-prime and self-certification mortgage markets.

A slight  improvement  in  arrears  and the  beneficial  effect  of house  price
increases  have meant  that bad debt  provisions  remained  at low  levels.  New
provisions  were more than offset by releases  and  recoveries  resulting  in an
GBP18 million net provisions  release for the year,  compared with a net release
of GBP1 million in 2002.


                                 Page 20 of 52


LLOYDS TSB GROUP

Insurance and Investments

(the life, pensions and unit trust businesses of Scottish Widows and Abbey Life;
general insurance underwriting and broking; and Scottish Widows Investment
Partnership)


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                          
Life, pensions and unit trusts
  Scottish Widows                                                                               379             590
  Abbey Life                                                                                     93              92
  Provisions for customer redress                                                              (100)           (205)
                                                                                                372             477
General insurance                                                                               720             753
Operating profit from Insurance                                                               1,092           1,230
Scottish Widows Investment Partnership                                                            2               -
Profit before tax*                                                                            1,094           1,230

Profit before tax, before provisions for customer redress*                                    1,194           1,435
*excluding changes in economic assumptions and investment variance



Profit before tax from Insurance and Investments,  excluding changes in economic
assumptions  and investment  variance,  decreased by GBP136  million,  or 11 per
cent, to GBP1,094 million, from GBP1,230 million in 2002. Profit before tax from
our life, pensions and unit trust businesses  decreased by GBP105 million, or 22
per cent,  to GBP372  million.  A reduction of GBP168  million in benefits  from
experience  variances and assumption  changes,  and a GBP61 million  decrease in
normalised investment earnings, were partly offset by a GBP105 million reduction
in provisions for customer redress.

The market  for  medium and  long-term  investments  continued  to be  adversely
affected by uncertainties in global stock markets.  Overall, weighted sales were
GBP733.4  million  compared to GBP767.6  million last year, a reduction of 4 per
cent.  This  decrease  in  weighted  sales  reflected  a 1 per cent  increase in
weighted  sales from life and  pensions,  offset by a 24 per cent  reduction  in
weighted sales from unit trusts and equity-based ISAs.

The 4 per cent reduction in weighted sales compared to a reduction of 11 per
cent in the weighted sales of the UK life, pensions and investments market and,
as a result, Scottish Widows increased its market share to 5.7 per cent, from
5.2 per cent in 2002.  In UK life and pensions, the market share in 2003
increased to 7.1 per cent, compared with 5.9 per cent in 2002.  By distribution
channel, weighted sales from independent financial advisors (IFA) rose by 17 per
cent as a result of strong regular savings and pensions sales.  Our share of the
IFA market in 2003 increased to 5.8 per cent, compared to 4.4 per cent in 2002.


                                 Page 21 of 52


LLOYDS TSB GROUP

Insurance and Investments (continued)

In the branch  network,  weighted  sales were 20 per cent lower as a result of a
significant reduction in the sales of single premium investments,  driven mainly
by  depressed  market  conditions  for unit  trusts  and  open-ended  investment
companies  (OEICs).  Our market share of life and pensions in the branch network
and direct  distribution  channels was broadly held at 8.0 per cent, compared to
8.1 per cent in 2002. The reduction of GBP685.1  million in the Group's sales of
single  premium  life  products  was,  however,  offset by an increase in Retail
Banking  customer  deposits of some GBP4.2 billion,  or 10 per cent,  during the
year.  This  reduction  in single  premium  life  product  sales was also partly
influenced by the Group's decision to reduce its emphasis on the sale of capital
intensive with-profits products. Scottish Widows remains one of the leading unit
trust and equity-based ISA providers in the UK.

In 2001, Scottish Widows was one of the first companies to be accredited under
the 'Raising Standards' quality mark, which aims to raise standards generally
throughout the insurance industry to create an environment which encourages
consumers to provide for their own future.  In March 2003 Scottish Widows was
one of the first companies to gain re-accreditation under 'Raising Standards',
confirming Scottish Widows' position at the forefront of industry-wide
initiatives to improve standards.  In the 2003 IFA Service Awards, Scottish
Widows achieved its best ever performance with a 5-star rating in all
categories.

Scottish Widows has been developing an actuarial model to assist in the
management of the with-profits fund and to meet regulatory requirements.  The
model allows management to estimate the effects of different economic scenarios
upon the financial position of the fund and consider the implications of
different management actions.  Preliminary output from this model indicates that
the possible cost of providing benefits on policies containing features such as
options and guarantees varies widely and, depending on the economic scenario
encountered, could result in the Group incurring a liability.  Based on the
information available at present, having considered a range of possible
outcomes, and after making allowance for the effect of proposed future
management actions, the Group currently considers that no provision is
necessary.  However, the model is subject to ongoing development and the
position will be kept under review.  We are also satisfied with Scottish Widows'
overall capital position calculated using the Financial Services Authority's new
'realistic' basis of balance sheet reporting.  On a market consistent basis, we
estimate a 'realistic' surplus within the long-term fund of Scottish Widows
which is more than three times the risk capital margin.  Scottish Widows remains
on track to pay a 2004 dividend to Lloyds TSB.

Profit  before  tax from  general  insurance  operations,  excluding  investment
variance,  decreased  by GBP33  million,  or 4 per cent,  to GBP720  million  as
continued  revenue  growth  from home  insurance  was offset by lower  levels of
creditor  insurance.  Sales from  direct  channels  continue  to grow  strongly,
increasing by some 1 million  policies,  or 14 per cent,  compared to 2002.  The
overall  claims  ratio of 42 per cent was lower  than last year (46 per cent) as
portfolio  growth  exceeded  the  rise  in  claims,  generally  reflecting  more
favourable weather conditions.


                                 Page 22 of 52


LLOYDS TSB GROUP

Insurance and Investments (continued)

Over the last 5 years the Group has delivered rapid growth in general insurance
product sales, largely through the branch network distribution channel, and the
number of policies in force has risen from less than 5 million to over 9
million.  This is a key indicator of the success of the Group's bancassurance
strategy.  With over 9 million policies in force, the Group is a market leader
in the distribution of home and creditor insurance.

Pre-tax profit from Scottish Widows Investment Partnership (SWIP) increased to
GBP2 million, reflecting increased revenues from new mandates gained in 2003 and
lower levels of investment spend as the programme of investment in new
infrastructure draws towards completion.  At the end of the year SWIP has GBP77
billion of funds under management, an increase of GBP7 billion during the year.
Over the three-year period to 31 December 2003, 80 per cent of SWIP's retail
funds, on a weighted basis, have performed above their benchmark and SWIP now
has a total of 18 funds rated A and above by Standard & Poor's, compared to 14
at the end of 2002.  SWIP remains strong in bond and property investment
management, with the Scottish Widows pensions and assurance fixed interest and
property funds showing top quartile performance over three and five years to
December 2003.  Asset management is a key component in the successful
implementation of the Group's bancassurance strategy, and SWIP has a major part
to play in this.


                                 Page 23 of 52


LLOYDS TSB GROUP

Insurance and Investments (continued)



                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                          
Total new business premium income
Regular premiums:
Life - mortgage related                                                                        43.9            35.0
     - non-mortgage related                                                                    51.4            32.7
Pensions                                                                                      236.7           212.7
Health                                                                                          5.9             5.9
Total regular premiums                                                                        337.9           286.3

Single premiums:
Life                                                                                          846.7         1,531.8
Annuities                                                                                     512.5           497.0
Pensions                                                                                    1,279.1         1,060.2
Total single premiums                                                                       2,638.3         3,089.0

External unit trust sales:
Regular payments                                                                               41.0            71.5
Single amounts                                                                                907.3         1,009.5
Total external unit trust sales                                                               948.3         1,081.0

Weighted sales (regular + 1/10 single)
Life and pensions                                                                             601.7           595.2
Unit trusts                                                                                   131.7           172.4
Life, pensions and unit trusts                                                                733.4           767.6


Weighted sales by distribution channel

Branch network                                                                                278.8           350.6
Independent financial advisors                                                                391.6           335.4
Direct                                                                                         61.6            67.9
Other, including International                                                                  1.4            13.7
Life, pensions and unit trusts                                                                733.4           767.6

Group funds under management                                                                  GBPbn           GBPbn
Scottish Widows Investment Partnership                                                           77              70
UK Wealth Management                                                                             11              10
International                                                                                    15              18
                                                                                                103              98


                                 Page 24 of 52


LLOYDS TSB GROUP

Insurance and Investments (continued)

Life, pensions and unit trusts


                                                                                         2003              2002
                                                                                         GBPm              GBPm
                                                                                                     
New business income                                                                       457               398
Life and pensions distribution costs                                                     (327)             (283)
New business contribution                                                                 130               115
Existing business
- expected return                                                                         276               273
- experience variances                                                                    (16)               (1)
- assumption changes and other items                                                      (75)               78
- provisions for customer redress                                                        (100)             (205)
                                                                                           85               145
Development costs                                                                         (13)                -
Investment earnings                                                                       153               214
                                                                                          355               474
Unit trusts                                                                                71                92
Unit trust distribution costs                                                             (54)              (89)
                                                                                           17                 3
Profit before tax*                                                                        372               477
Profit before tax, excluding provisions
for customer redress*                                                                     472               682

New business margin (life and pensions)                                                 21.6%             19.3%



*excluding changes in economic assumptions and investment variance


New business income increased by 15 per cent supported by a 1 per cent growth in
weighted sales from life and pensions products,  an increase in the new business
margin, and an improved performance in the more profitable life products.  After
deducting  distribution costs, the new business contribution increased by 13 per
cent from  GBP115  million  in 2002,  to GBP130  million  in 2003.  The life and
pensions new business margin,  defined as new business  contribution  divided by
weighted  sales,  increased  to 21.6 per cent,  from 19.3 per cent in 2002.  The
improvement reflects our strategy to improve product mix, particularly in moving
to higher margin protection and regular premium life products.

Profit before tax from existing business fell by GBP60 million,  or 41 per cent,
to GBP85  million.  The expected  return from existing  business,  which largely
reflects the  unwinding of the  long-term  discount rate applied to the expected
cash flows from the Group's  portfolio of in-force  business,  increased by GBP3
million, to GBP276 million as lower restructuring costs in 2003 more than offset
a reduction in the income from the unwind of the long-term discount rate. During
2003,  there  was a  reduction  of  GBP91  million  from  changes  in  actuarial
assumptions and experience variances,  compared to a benefit of GBP77 million in
2002,  partly  reflecting the  capitalisation  of pension scheme  contributions,
following  their  recommencement  in 2003,  within the  Group's  embedded  value
calculations and an increase in assumed lapse rates for term assurance business.


                                 Page 25 of 52


LLOYDS TSB GROUP

Insurance and Investments (continued)

General insurance


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                          
Premium income from underwriting
Creditor                                                                                        104             107
Home                                                                                            410             350
Health                                                                                           43              44
Reinsurance premiums                                                                            (22)            (15)
                                                                                                535             486
Commissions from insurance broking
Creditor                                                                                        351             426
Home                                                                                             30              44
Health                                                                                           16              17
Other                                                                                           207             160
                                                                                                604             647

Profit before tax*
Underwriting                                                                                    219             198
Broking                                                                                         501             555
                                                                                                720             753


*excluding investment variance



Profit before tax,  excluding  investment  variance,  from our general insurance
operations,  comprising both underwriting and broking  activities,  decreased by
GBP33 million, or 4 per cent, to GBP720 million. This comprised a pre-tax profit
of GBP219 million from general  insurance  underwriting  and GBP501 million from
broking activities.

The pre-tax profit of the underwriting business, at GBP219 million, increased by
GBP21 million,  or 11 per cent, from GBP198 million in 2002. Premium income from
underwriting  increased by GBP49 million, or 10 per cent, largely as a result of
higher home insurance  income which  increased by 17 per cent.  Claims were GBP7
million  higher at GBP236  million than in 2002.  The overall claims ratio of 42
per cent was lower than last year (46 per cent) as portfolio growth exceeded the
rise in claims, generally reflecting more favourable weather conditions.  Profit
before  tax from the  general  insurance  broking  business  decreased  by GBP54
million,  or 10 per cent,  to  GBP501  million,  from  GBP555  million  in 2002.
Commissions from insurance  broking  decreased by GBP43 million,  or 7 per cent,
largely as a result of lower  levels of  creditor  insurance,  which were partly
offset by higher retrospective commissions.

Overall, sales from direct channels (direct mail, telephone, affinity and
internet) continue to grow strongly with over 1 million new policies sold
through direct channels in 2003, an increase of 14 per cent compared to 2002.
Sales through the internet distribution channel almost doubled in 2003.


                                 Page 26 of 52


LLOYDS TSB GROUP

Wholesale and International Banking

(banking, treasury, large value lease finance, long-term agricultural finance,
share registration, venture capital, and other related services for major UK and
multinational companies, banks and financial institutions, and small and
medium-sized UK businesses; Lloyds TSB Asset Finance; and banking and financial
services overseas in three main areas: The Americas, New Zealand, and Europe and
Offshore Banking)


                                                                                             2003              2002
                                                                                             GBPm              GBPm
                                                                                                         
Net interest income                                                                         2,387             2,458
Other income                                                                                1,656             1,588
Total income                                                                                4,043             4,046
Operating expenses                                                                          2,300             2,185
Trading surplus                                                                             1,743             1,861
Provisions for bad and doubtful debts                                                         369               540
Amounts written off fixed asset investments                                                    44                57
                                                                                            1,330             1,264
Profit on sale of businesses                                                                  865                 -
Profit before tax                                                                           2,195             1,264

Efficiency ratio                                                                             56.9%             54.0%
Total assets (year-end)                                                                GBP101.6bn        GBP117.1bn
Total risk-weighted assets (year-end)                                                   GBP63.1bn         GBP73.0bn



Wholesale and International  Banking pre-tax profit increased by GBP931 million,
to  GBP2,195  million,  largely  reflecting  the  GBP865  million  profit on the
disposal of a number of overseas  businesses.  In  Wholesale,  the impact of the
Competition  Commission's  SME report  remedies  and lower  income in  Financial
Markets  was more than  offset by strong  profit  growth in asset  finance and a
reduction in provisions for bad and doubtful debts. This led to an increase of 1
per cent in profit before tax from GBP883  million in 2002, to GBP890 million in
2003. In International Banking profit before tax increased by GBP924 million, to
GBP1,305  million,  largely as a result of the GBP865 million overseas  business
disposal profits, and a lower provisions charge in Argentina.

Net interest income decreased by GBP71 million reflecting higher income in the
asset finance businesses which was more than offset by a reduction of GBP169
million following the implementation of the Competition Commission's SME
remedies.  Other income increased by GBP68 million, largely as a result of the
acquisition of First National Vehicle Holdings and Abbey National Vehicle
Finance in April 2002, and the Dutton-Forshaw Group in December 2002.  Operating
expenses increased by GBP115 million, compared with last year, of which GBP71
million related to the asset finance acquisitions, and GBP44 million reflected a
combination of volume growth, local inflation, and the impact of exchange rate
movements in the Group's international businesses.


                                 Page 27 of 52


LLOYDS TSB GROUP

Wholesale and International Banking (continued)

The charge for provisions for bad and doubtful debts decreased by GBP171 million
to GBP369  million.  The  charge in  Wholesale  fell by GBP78  million to GBP300
million,  despite a small  increase  in  provisions  within  the  asset  finance
businesses  reflecting portfolio growth. In 2002, provisions against Group loans
and  advances  to certain  large US  corporate  customers  totalled  some GBP100
million  and  these  were  not  repeated,  to  the  same  extent,  in  2003.  In
International  Banking the charge  decreased by GBP93 million,  to GBP69 million
partly reflecting the absence in 2003 of an increase in the general provision in
Argentina.  Amounts  written  off fixed  asset  investments  decreased  by GBP13
million.

Total assets fell by GBP15,511  million,  or 13 per cent, to GBP101,555  million
largely  reflecting  a reduction  of  GBP14,602  million as a result of overseas
business  disposals.  In  Wholesale,  assets  reduced by 1 per cent to GBP94,812
million,  a  decrease  of GBP956  million.  Strong  growth in the asset  finance
businesses in 2003 was more than offset by a reduction in finer margin loans and
debt  securities  in Financial  Markets.  In  International  Banking there was a
reduction  of GBP14,555  million in assets,  to GBP6,743  million,  largely as a
result of the disposals of The National Bank of New Zealand,  and  substantially
all of the Group's businesses in Brazil.

In Financial Markets pre-tax profits decreased by 22 per cent to GBP149 million,
compared with GBP192 million in 2002 reflecting less favourable trading
conditions, lower money market income and finer margins on interest rate
derivatives.

Structured Asset Finance, incorporating Lloyds TSB Leasing, remains one of the
UK's leading big-ticket lessors.  In support of corporate customers, Capital
Markets improved market share in the UK loan syndications market, achieving
third place for the number of Lead Arranger roles for UK investment grade
companies.  Lloyds TSB Development Capital achieved a pre-tax profit of GBP16
million, compared to a loss of GBP19 million in 2002.  This was largely
attributable to higher realisations of venture capital gains.  Record levels of
new acquisition finance deals and commitments were achieved in 2003, with a
lower level of provisions.  The launch of a new conduit securitisation vehicle
during 2003 has enabled the Group to provide a complete, and competitive,
product solution to corporate clients covering a wide range of asset based
lending from invoice discounting and factoring to securitisation.

Lloyds TSB Registrars' share of the registration market for FTSE 100 companies
increased to 59 per cent, its market leadership in employee share administration
services was maintained, and customer take-up of Shareview Dealing, the Group's
telephone and internet-based retail sharedealing service, has been good,
following its launch in March 2003.  However, a significant reduction in levels
of corporate transaction activity led to a reduction in pre-tax profits to GBP29
million, from GBP45 million in 2002.

Pre-tax profits in Lloyds TSB Asset Finance  increased by 145 per cent to GBP162
million,  compared with GBP66 million last year.  This reflects strong growth in
the motor and leisure business and growth in the consumer and commercial finance
businesses,  in  addition  to the impact of the  acquisition  of First  National
Vehicle  Holdings  and Abbey  National  Vehicle  Finance in April 2002,  and the
Dutton-Forshaw  Group in December 2002. These businesses have been  successfully
integrated into Lloyds TSB Asset Finance,  where Lloyds TSB autolease is now the
largest  contract  hire  operator  in the UK.  The Group has  maintained  market
leadership, and continues to grow market share, in point-of-sale motor finance.


                                 Page 28 of 52


LLOYDS TSB GROUP

Wholesale and International Banking (continued)

The number of businesses using asset based finance continues to grow strongly,
and Lloyds TSB Commercial Finance and its specialist factoring division, Alex
Lawrie Factors, have maintained a 19 per cent market share in invoice
discounting and factoring in the UK.  Data from The Factors and Discounters
Association confirms Lloyds TSB Commercial Finance's market leadership position.

Business  Banking  continued to grow its customer  franchise,  with a 6 per cent
increase in customer  recruitment in 2003 and a 9 per cent reduction in customer
attrition.  Customer  deposits  rose by 6 per cent to  GBP10,006  million,  from
GBP9,412  million in  December  2002,  however  customer  lending  decreased  to
GBP5,466 million, from GBP5,487 million in December 2002.

Pre-tax profits from The National Bank of New Zealand totalled GBP255 million,
compared to GBP218 million in 2002, and the Group's businesses in Brazil made a
pre-tax profit of GBP64 million, compared with GBP79 million in 2002.

The Group's  international  wealth  management  businesses  have been  adversely
impacted by low interest  rates and equity market  volatility  and, as a result,
Offshore  Banking and European  Private  Banking  pre-tax  profits fell by GBP43
million to GBP127  million,  compared with 2002,  which  benefited  from a GBP21
million  profit on the sale and leaseback of premises,  compared to a benefit of
GBP4 million in 2003.

In May 2003 Lloyds TSB agreed the sale of its French fund management and private
banking businesses, including its subsidiaries, Lloyds Bank SA, Chaillot
Assurances SA and Capucines Investissements SA, to UBS (France) SA.  On 1
December 2003, the Group completed the disposal of its subsidiary, NBNZ Holdings
Limited ('NBNZ'), comprising the Group's New Zealand banking and insurance
operations, to Australia and New Zealand Banking Group Limited.

In December 2003, the Group also completed the sale, to HSBC, of its Brazilian
subsidiaries Banco Lloyds TSB S.A. and Losango Promotora de Vendas Ltda,
together with substantially all of the business of its Brazilian branch, and
certain offshore Brazilian assets.  In aggregate, a profit before tax on
disposals of GBP865 million has been recognised in the 2003 profit and loss
account.  The sale of The National Bank of New Zealand created a profit before
tax of GBP921 million, whilst the sale of the Group's French fund management and
private banking businesses and Brazilian businesses led to losses before tax of
GBP15 million and GBP41 million respectively.

On 1 December 2003, the Group announced that it had agreed to dispose of its
businesses in Guatemala, Honduras and Panama, together with certain offshore
assets, for a cash consideration equivalent to some GBP47 million.  The sale of
these businesses, which remains subject to approval by the relevant regulatory
authorities, is expected to be completed during 2004.


                                 Page 29 of 52


LLOYDS TSB GROUP

Central group items

(earnings on surplus capital and the emerging markets debt investment portfolio,
central costs and other unallocated items)


                                                                                                2003           2002
                                                                                                GBPm           GBPm
                                                                                                          
Accrual for payment to Lloyds TSB Foundations                                                   (31)            (33)
Other finance income                                                                             34             165
Earnings on surplus capital and the emerging markets debt
investment portfolio                                                                            (50)           (105)
Central costs and other unallocated items                                                       (18)            (23)
                                                                                                (65)              4


The four independent Lloyds TSB Foundations support registered charities
throughout the UK that enable people, particularly disabled and disadvantaged,
to play a fuller role in society.  The Foundations receive 1 per cent of the
Group's pre-tax profit, averaged over three years, instead of the dividend on
their shareholdings, making them in aggregate one of the largest independent
grant giving bodies in the UK.  In 2003, the Group accrued GBP31 million for
payment to the Lloyds TSB Foundations.

Other finance income represents income from the expected return on the Group's
pension fund assets less the charge for unwinding the discount on the pension
fund liabilities.  The significant reduction in income in 2003 reflects the
combined impact of a reduction in the expected return on lower pension scheme
assets as a result of the continuing weakness in global equity markets, and
increased pension fund liabilities caused by the expected greater lifespan of
pension scheme members.

Earnings on surplus capital and the emerging markets debt investment portfolio
reflect earnings on capital held at the Group centre, less the funding cost of
recent acquisitions, and profits from the Group's investment portfolio of
emerging markets debt securities.  During the first half of 2003 improved
secondary bond market conditions allowed the Group to sell its portfolio of
emerging markets debt securities.  Profits on bond sales, and certain closed
foreign exchange positions, in 2003 totalled GBP295 million, compared to GBP212
million in 2002.  The Group will not achieve any further contribution from the
emerging markets debt portfolio.


                                 Page 30 of 52


LLOYDS TSB GROUP

Income

Group net interest income


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                         
Net interest income                                                                           5,255           5,171

Average balances
Short-term liquid assets                                                                      2,778           3,514
Loans and advances                                                                          155,591         143,621
Debt securities                                                                              14,527          14,683
Total interest-earning assets                                                               172,896         161,818

Financed by:
Interest-bearing liabilities                                                                165,613         150,203
Interest-free liabilities                                                                     7,283          11,615

Average rates                                                                                     %               %
Gross yield on interest-earning assets                                                         5.87            6.52
Cost of interest-bearing liabilities                                                           2.96            3.58
Interest spread                                                                                2.91            2.94
Contribution of interest-free liabilities                                                      0.13            0.26
Net interest margin                                                                            3.04            3.20



Group net interest income increased by GBP84 million, or 2 per cent, to GBP5,255
million, despite a reduction of GBP259 million caused by a 16 basis points
reduction in the net interest margin.  The implementation of the Competition
Commission's SME report remedies reduced Group net interest income by GBP169
million, and the net interest margin by some 10 basis points in 2003.

Average  interest-earning  assets  increased  by 7 per cent to  GBP173  billion.
Within UK Retail Banking and Mortgages, continued strong growth led to increases
of GBP2,173  million in average  personal  lending and credit card  balances and
GBP7,424   million  in  average   mortgage   balances.   Within   Wholesale  and
International  Banking,  average  interest-earning  assets increased by GBP2,010
million,  reflecting  growth in asset finance  balances and  structured  finance
products  which has more than offset a reduction in balances  within the Group's
treasury operations due to fewer market opportunities in 2003. Overseas,  growth
in balances in New Zealand,  principally  due to exchange  rate  movements,  was
partly offset by reductions in Latin America as the Group's  exposures to Brazil
and Argentina have been further reduced.  There was also a reduction of GBP1,207
million following the disposal of the Group's portfolio of emerging markets debt
securities.

Excluding the Competition Commission impact, the 6 basis points decrease in the
overall net interest margin reflected a lower contribution from interest-free
liabilities, partly caused by the fall in average UK interest rates, and a
reduction of 3 basis points in the interest spread.  The mix effect from the
higher levels of growth in the mortgage portfolio and some mortgage margin
erosion was partly offset by an improvement in the margin in the asset finance
businesses.


                                 Page 31 of 52


LLOYDS TSB GROUP

Domestic net interest income


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                         
Net interest income                                                                           4,556           4,425

Average balances
Short-term liquid assets                                                                      2,237           2,608
Loans and advances                                                                          134,600         123,633
Debt securities                                                                               9,863           8,661
Total interest-earning assets                                                               146,700         134,902

Financed by:
Interest-bearing liabilities                                                                143,077         125,964
Interest-free liabilities                                                                     3,623           8,938

Average rates                                                                                     %               %
Gross yield on interest-earning assets                                                         5.79            6.10
Cost of interest-bearing liabilities                                                           2.75            3.02
Interest spread                                                                                3.04            3.08
Contribution of interest-free liabilities                                                      0.07            0.20
Net interest margin                                                                            3.11            3.28



Domestic net interest  income  increased by GBP131  million,  or 3 per cent,  to
GBP4,556  million,  notwithstanding a reduction of GBP229 million caused by a 17
basis points reduction in the net interest  margin.  This represents 87 per cent
of total Group net interest income.

Average  interest-earning  assets increased by GBP12 billion,  or 9 per cent, to
GBP147  billion.  Within UK Retail Banking and Mortgages  balances  increased by
GBP9,590  million  largely  as a result of growth in the  consumer  lending  and
mortgages  portfolios,  helped by the acquisition  during the year of the credit
card and personal  loan  portfolios  of Goldfish  Bank.  In  Wholesale  balances
increased by GBP1,558 million mainly due to growth in asset finance balances and
structured transactions.

The net interest margin decreased by 17 basis points reflecting a reduction in
the contribution of interest-free liabilities and the impact of the
implementation of the remedies suggested by the Competition Commission,
following its investigation into the supply of banking services to small and
medium size enterprises.  In UK Retail Banking and Mortgages there was a 19
basis point decrease in the net interest margin which was caused by finer
margins being earned in the mortgage business as a result of competitive
pressures and the effect of lower average interest rates reducing the benefit of
low cost and interest-free funds.  This was partly offset by improved margins on
personal loans reflecting the lower funding cost.  Within Wholesale the margin
fell by 21 basis points as the effect of the Competition Commission's SME report
remedies and continuing growth in finer margin structured transactions was only
partly offset by an improved margin in the asset finance businesses.


                                 Page 32 of 52


LLOYDS TSB GROUP

International net interest income


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                          
Net interest income                                                                             699             746

Average balances
Short-term liquid assets                                                                        541             906
Loans and advances                                                                           20,991          19,988
Debt securities                                                                               4,664           6,022
Total interest-earning assets                                                                26,196          26,916

Financed by:
Interest-bearing liabilities                                                                 22,536          24,239
Interest-free liabilities                                                                     3,660           2,677

Average rates                                                                                     %               %
Gross yield on interest-earning assets                                                         6.33            8.63
Cost of interest-bearing liabilities                                                           4.26            6.51
Interest spread                                                                                2.07            2.12
Contribution of interest-free liabilities                                                      0.60            0.65
Net interest margin                                                                            2.67            2.77



Net interest income from international operations decreased by GBP47 million, or
6 per cent, to GBP699  million.  This  represents 13 per cent of total Group net
interest income.

In sterling terms average  interest-earning  assets decreased by GBP720 million,
or 3 per cent, to GBP26.2 billion.  Average balances in New Zealand increased by
GBP1,974  million  mainly  as a result  of  positive  exchange  rate  movements.
Balances  in Latin  America  fell by GBP765  million  as the Group has sought to
reduce its exposure to this region, and wholesale  balances,  principally in the
US,  fell by GBP456  million  as growth  in local  currency  terms was more than
offset by movements in exchange rates.  The  reclassification  to trading assets
and  subsequent  disposal of the Group's  portfolio  of  emerging  markets  debt
securities reduced average interest-earning assets by GBP1,207 million.

The net interest margin reduced by 10 basis points largely as a result of the
sale of the Group's portfolio of emerging markets debt securities.


                                 Page 33 of 52


LLOYDS TSB GROUP

Other income


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                         
Fees and commissions receivable:
  UK current account fees                                                                       623             579
  Other UK fees and commissions                                                               1,173           1,163
  Insurance broking                                                                             604             647
  Card services                                                                                 460             414
  International fees and commissions                                                            239             250
                                                                                              3,099           3,053
Fees and commissions payable                                                                   (722)           (645)
Dealing profits (before expenses):
  Foreign exchange income                                                                       228             173
  Securities and other gains                                                                    332              15
                                                                                                560             188
Income from long-term assurance business                                                        453            (294)
General insurance premium income                                                                535             486
Other operating income                                                                          694             763
Total other income                                                                            4,619           3,551



Other income increased by GBP1,068 million, or 30 per cent, to GBP4,619 million.

Fees and commissions  receivable  increased by GBP46 million,  or 2 per cent, to
GBP3,099 million,  largely reflecting good growth in UK current account fees and
higher  income  from  credit and debit card  services,  which more than offset a
reduction in insurance broking  commissions.  UK current account fee income rose
by GBP44  million,  largely  reflecting  increased fee income from growth in the
number of added value current accounts.  Other UK fees and commissions increased
by GBP10 million,  or 1 per cent, to GBP1,173 million.  There was an increase of
GBP20 million in mortgage  related fees,  reflecting  the growth in new mortgage
lending  during the year,  and an increase  of GBP16  million in fees from large
corporate and factoring activity, reflecting increased transaction volumes. This
growth has been largely  offset by a further  reduction of GBP27 million in unit
trust and asset  management  fees  reflecting  lower average fund values and the
continued  weakness of the long-term  savings  market.  Fee income in Lloyds TSB
Registrars also fell as levels of corporate  activity remained  subdued.  Income
from  credit and debit card  services  increased  by GBP46  million  mainly as a
result of a growth in interchange  income,  partly reflecting the acquisition of
the  Goldfish  credit  card  portfolio  during  2003,  and higher  overseas  use
commission and other fees.

Insurance  broking  commission  income  decreased by GBP43  million,  as a GBP75
million fall in income from  creditor  insurance,  reflecting a reduction in the
level of sales achieved through the branch network,  and a further  allowance of
GBP35  million in respect of the clawback of  commissions  relating to the early
settlement  of  personal  loans,  more than offset a GBP55  million  increase in
retrospective  commissions.  International fees and commissions reduced by GBP11
million  partly due to the disposal of the Group's fund  management  business in
France.


                                 Page 34 of 52


LLOYDS TSB GROUP

Other income (continued)

Fees and commissions payable increased by GBP77 million as a result of a GBP36
million increase in commissions paid to motor dealers by the asset finance
operation, reflecting the growth in the levels of new business, and higher costs
relating to legal expenses and valuation fee incentives supporting the strong
mortgage growth.  Fees payable in respect of the credit and debit card business
also increased, mainly reflecting volume growth and the cost of customer
incentives.

Dealing profits increased by GBP372 million compared with 2002 as a result of an
increase of GBP55 million in foreign  exchange  income and an increase of GBP317
million in gains from securities  trading,  largely reflecting earnings from the
portfolio of emerging  markets debt  investments  which, at the end of 2002, was
reclassified as a trading  portfolio.  In 2002,  earnings from emerging  markets
debt investments were primarily  reported within other operating income.  Income
from  long-term   assurance  business  increased  by  GBP747  million,   largely
reflecting the absence of the negative investment variance reported in 2002.

Premium income from general insurance  underwriting  increased by GBP49 million,
or 10 per cent, to GBP535 million, compared to GBP486 million in 2002. There was
growth of GBP60 million in premiums  from home  insurance  products,  reflecting
successful  cross-selling  to the Group's  mortgage  customers and the continued
strength of the UK housing market,  partly offset by a GBP7 million  increase in
reinsurance premiums.

Other operating income decreased by GBP69 million to GBP694 million,  reflecting
the  reclassification  of  earnings  on the  emerging  markets  debt  investment
portfolio to dealing profits, and a reduction of GBP28 million in profits on the
sale and leaseback of premises  which,  in 2003,  totalled  GBP4 million.  These
decreases  more than offset a GBP51 million  increase in income from the sale of
cars following the acquisition of the Dutton-Forshaw Group in December 2002, and
a GBP26  million  increase  in the  gains  on  realisation  of  venture  capital
investments by Lloyds TSB  Development  Capital.  There were also gains of GBP34
million following the sale of a number of leases by Lloyds TSB Leasing.


                                 Page 35 of 52


LLOYDS TSB GROUP

                                                   OPERATING EXPENSES

Operating expenses


                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                          
Administrative expenses:
Staff:
  Salaries                                                                                    1,801           1,758
  National insurance                                                                            143             134
  Pensions                                                                                      353             318
  Restructuring                                                                                  57             105
  Other staff costs                                                                             234             202
                                                                                              2,588           2,517
Premises and equipment:
  Rent and rates                                                                                281             280
  Hire of equipment                                                                              18              18
  Repairs and maintenance                                                                       127             131
  Other                                                                                         118             114
                                                                                                544             543
Other expenses:
  Communications and external data processing                                                   446             446
  Advertising and promotion                                                                     172             147
  Professional fees                                                                             123             113
  Provisions for customer redress                                                               200               -
  Other                                                                                         403             446
                                                                                              1,344           1,152
Administrative expenses                                                                       4,476           4,212
Depreciation                                                                                    646             642
Amortisation of goodwill                                                                         51              59
Total operating expenses                                                                      5,173           4,913

Efficiency ratio                                                                              52.2%           55.3%



Total operating expenses increased by GBP260 million, or 5 per cent, to GBP5,173
million compared to GBP4,913 million in 2002.  The impact of acquisitions
increased operating expenses by GBP110 million in 2003, and there was a GBP200
million provision for customer redress.  Excluding these two items, operating
expenses reduced by 1 per cent.


                                 Page 36 of 52


LLOYDS TSB GROUP

Operating expenses (continued)

Administrative expenses increased by GBP264 million to GBP4,476 million, largely
reflecting the GBP200 million provision for customer  redress.  Staff costs were
GBP71 million higher at GBP2,588 million.  Salaries were GBP43 million, or 2 per
cent,  higher as the impact of the annual pay review and the  acquisitions  made
during 2002 have more than offset the impact of an underlying reduction in staff
numbers of 1,209.  The cost of bonuses and other  performance  related  payments
remained  broadly  unchanged.  National  insurance  costs  grew by GBP9  million
reflecting  the  higher  overall  salary  bill and the  increase  in  employers'
contribution  rates which took effect in April 2003.  Pension costs increased by
GBP35 million, or 11 per cent,  reflecting growth in the current service cost as
interest  rates have fallen and an  increase in the level of cash  contributions
being made into defined  contribution  schemes in the UK. Other staff costs grew
by GBP32 million  because of increased use of agency and other contract staff to
support a number of major IT development  projects and a significant increase in
training  costs,  particularly  for staff working in the branch  network.  These
factors have been partly  offset by a GBP48  million  reduction in severance and
related costs following the completion of a number of major initiatives.

Premises and equipment costs were GBP1 million  higher.  There was little change
in costs  during  2003 as the  effect of branch  closures  offset  the impact of
acquisitions made during 2002.

Other expenses  increased by GBP192  million,  largely as a result of the GBP200
million provision for customer  redress.  Advertising  expenditure  increased by
GBP25 million mainly reflecting  promotional  expenditure incurred in connection
with the credit card and mortgage  businesses  and also wider use of  television
advertising during 2003. Professional fees increased by GBP10 million, to GBP123
million,  due to  greater  use of  external  consultants  on a  number  of major
projects.  This has been offset by a GBP43 million  reduction in other expenses.
There has been a reduction in the  processing  charges paid to iPSL, the Group's
clearings joint venture, and reduced credit and debit card fraud losses.

Depreciation  rose by GBP4 million.  Operating lease  depreciation  increased by
GBP19 million as an accelerated  charge was recorded  following the reassessment
of the carrying  value on a small number of big ticket  operating  lease assets.
This was  offset by a GBP15  million  reduction  in the  charge  on other  fixed
assets,   mainly  reflecting  the  accelerated  write-off  of  certain  software
development costs in 2002. Goodwill amortisation was GBP8 million lower.

The efficiency ratio was 52.2 per cent, compared to 55.3 per cent in 2002.


                                 Page 37 of 52


LLOYDS TSB GROUP

Operating expenses (continued)

Number of employees (full-time equivalent)

Staff numbers decreased by 7,928 to 71,609 during the year, largely as a result
of the disposal during 2003 of the Group's businesses in New Zealand, Brazil and
France which led to a reduction in staff numbers of 7,103.  Excluding the impact
of acquisitions and disposals, there was an underlying reduction of 1,209 in
Group staff numbers.

Within UK Retail Banking and Mortgages staff numbers decreased by 146, as
planned improvements to customer service were more than offset by reductions in
back office operations.  In Insurance and Investments there was a decrease of
138 staff reflecting service efficiency improvements.  In Wholesale and
International Banking staff numbers decreased by 7,485, largely as a result of
the disposals of overseas businesses.



                                                                                    31 December         31 December
                                                                                           2003                2002
                                                                                                         
UK Retail Banking and Mortgages                                                          44,478              44,624
Insurance and Investments                                                                 5,783               5,921
Wholesale and International Banking                                                      19,414              26,899
Other                                                                                     1,934               2,093
Total number of employees (full-time equivalent)                                         71,609              79,537




                                 Page 38 of 52


LLOYDS TSB GROUP

                                                  CREDIT QUALITY

Charge for bad and doubtful debts



                                                                                               2003            2002
                                                                                               GBPm            GBPm
                                                                                                           
UK Retail Banking and Mortgages                                                                 594             496
Wholesale and International Banking                                                             369             540
Central group items                                                                             (13)             (7)
Total charge                                                                                    950           1,029


Specific provisions                                                                             946             965
General provisions                                                                                4              64
Total charge                                                                                    950           1,029

Charge as % of average lending:                                                                   %               %
Domestic                                                                                       0.69            0.70
International                                                                                  0.40            1.28
Total charge                                                                                   0.66            0.77



The total charge for bad and doubtful debts decreased by GBP79 million, or 8 per
cent, to GBP950  million.  In UK Retail  Banking and  Mortgages  the  provisions
charge  increased to GBP594  million,  from GBP496  million in 2002.  The charge
within UK Retail  Banking  increased by GBP115 million mainly due to an increase
in the provisions required against the personal loan and credit card portfolios,
largely  attributable  to the  growth  in the  size of these  portfolios  and an
increase in fraud related losses.  There was a net release of GBP18 million from
the provisions held against the mortgages  portfolio,  compared to a net release
of GBP1 million in 2002,  mainly reflecting an improved arrears position and the
increase in the value of the property held as security.

In Wholesale  and  International  Banking the  provisions  charge fell by GBP171
million to GBP369 million.  The charge within Wholesale fell by GBP78 million as
the level of new provisions  required against corporate  customers  reduced.  In
2002 provisions totalling some GBP100 million were made against certain large US
corporate  exposures  which have not been repeated,  to the same extent,  during
2003. Within International  Banking the charge fell by GBP93 million mainly as a
result of a reduction of GBP79 million in the new  provisions  required  against
the Group's  exposures in Argentina as economic  conditions in that country have
started to  stabilise.  There has also been a  reduction  in the charge in other
Latin American  businesses as specific cases  requiring  provisions in 2002 have
not been repeated.

Within  Central  group  items  there was a net  release of  provisions  of GBP13
million  from the  provisions  held  against  medium-term  debt in the  emerging
markets  portfolio.  This  portfolio  has now either  been  disposed  of, or the
lending has been repaid.

The Group's charge for bad and doubtful debts as a percentage of average lending
decreased to 0.66 per cent, compared to 0.77 per cent in 2002.


                                 Page 39 of 52


LLOYDS TSB GROUP

Movements in provisions for bad and doubtful debts


                                                                      2003                            2002
                                                            Specific        General         Specific        General
                                                                GBPm           GBPm             GBPm           GBPm
                                                                                                    
At beginning of year                                           1,334            433            1,099            369
Exchange and other adjustments                                    (1)             -              (55)            (3)
Transfer from general to specific provisions                      50            (50)               -              -
Adjustments on acquisitions and disposals                        (49)            (5)               -              3
Advances written off                                          (1,145)             -             (878)             -
Recoveries of advances written off in                            178              -              203              -

previous years
Charge to profit and loss account:
New and additional provisions                                  1,552              9            1,544             64
Releases and recoveries                                         (606)            (5)            (579)             -
                                                                 946              4              965             64
At end of year                                                 1,313            382            1,334            433
                                                                       1,695                           1,767
Closing provisions as % of lending

(excluding unapplied interest)
Specific:
Domestic                                                       1,132          (0.9%)           1,016          (0.8%)
International                                                    181          (2.8%)             318          (1.7%)
                                                               1,313          (0.9%)           1,334          (1.0%)
General                                                          382          (0.3%)             433          (0.3%)
Total                                                          1,695          (1.2%)           1,767          (1.3%)



At the end of December  2003  provisions  for bad and  doubtful  debts  totalled
GBP1,695 million. This represented 1.2 per cent of total lending (December 2002:
1.3 per  cent).  Non-performing  lending  decreased  to  GBP1,218  million  from
GBP1,414  million in December  2002,  largely  reflecting the impact of business
disposals and lower levels of  non-performing  lending in the Group's  corporate
portfolio,  which were partly offset by general portfolio growth in the consumer
lending  portfolios.  Non-performing  lending  represented 0.9 per cent of total
lending,  unchanged  from  December  2002.  At the  end of  the  year,  specific
provisions represented over 100 per cent of non-performing loans (December 2002:
over 90 per cent).


                                 Page 40 of 52


LLOYDS TSB GROUP

                                                   CAPITAL RATIOS

Risk asset ratios


                                                                                     31 December        31 December
                                                                                            2003               2002
                                                                                            GBPm               GBPm
                                                                                                         
Capital

Tier 1                                                                                    11,223              9,442
Tier 2                                                                                     8,935              8,846
                                                                                          20,158             18,288

Supervisory deductions                                                                    (6,898)            (6,573)

Total capital                                                                             13,260             11,715


Risk-weighted assets                                                                       GBPbn              GBPbn
UK Retail Banking and Mortgages                                                             53.8               48.4
Insurance and Investments                                                                    0.2                0.2
Wholesale and International Banking                                                         63.1               73.0
Central group items                                                                          0.6                0.8
Total risk-weighted assets                                                                 117.7              122.4

Risk asset ratios

Total capital                                                                              11.3%               9.6%
Tier 1                                                                                      9.5%               7.7%

Post-tax return on average risk-weighted assets                                            2.63%              1.62%




At the end of December 2003 the risk asset ratios were 11.3 per cent for total
capital and 9.5 per cent for tier 1 capital.

During 2003, total capital for regulatory purposes increased by GBP1,545 million
to GBP13,260 million. Tier 1 capital increased by GBP1,781 million,  mainly from
retained profits.  Tier 2 capital increased by GBP89 million, as a result of the
issue of new tier 2 capital  instruments.  Supervisory  deductions  increased by
GBP325  million,  as a result of an increase in the  Group's  embedded  value to
GBP6,481 million, from GBP6,213 million in December 2002.

Risk-weighted assets decreased by 4 per cent to GBP118 billion, as strong growth
in consumer lending and mortgages in the UK was more than offset by the impact
of a number of overseas business disposals.  The post-tax return on average
risk-weighted assets increased to 2.63 per cent.


                                 Page 41 of 52


LLOYDS TSB GROUP

                    OVERVIEW OF CONSOLIDATED BALANCE SHEET

Review of balance sheet at 31 December 2003, compared to 31 December 2002

Assets

Total assets  decreased by GBP549  million to GBP252,012  million,  reflecting a
reduction  of  GBP14,602  million as a result of  overseas  business  disposals,
largely offset by strong growth in underlying loans and advances to customers.

Cash and balances at central banks increased by GBP55 million, or 5 per cent, to
GBP1,195  million as a result of higher  balances held to cater for  anticipated
demand over the year-end holiday period. Treasury bills and other eligible bills
decreased to GBP539 million from GBP2,409  million  reflecting  lower  liquidity
management  balances and a reduction of GBP501 million from business  disposals.
Loans and advances to banks decreased by GBP1,982  million to GBP15,547  million
partly for  liquidity  management  purposes,  and partly as a result of business
disposals.

Loans and advances to customers  increased by GBP777 million,  or 1 per cent, to
GBP135,251  million,  despite a reduction  of  GBP11,322  million as a result of
business  disposals.  The underlying growth largely reflects strong growth in UK
retail lending,  particularly  mortgage and consumer lending.  Domestic customer
lending increased by 11 per cent whilst  international  customer lending fell by
GBP12,398 million mainly reflecting business disposals.

Debt securities  decreased by GBP645 million to GBP28,669 million as a reduction
of GBP1.1 billion on sales of emerging market debt investments and the impact of
disposals was partly offset by new structured finance transactions and increased
holdings for liquidity management purposes.

Intangible  assets  declined  by  GBP121  million  to  GBP2,513  million  as the
reduction  of GBP189  million due to business  sales and  amortisation  of GBP51
million  was  partly  offset by new  goodwill  of GBP96  million  arising on the
acquisition  of the  Goldfish  business.  Tangible  fixed  assets fell by GBP178
million to  GBP3,918  million as the impact of  disposals  of GBP80  million and
depreciation  of GBP646 million was partially  offset by net additions of GBP605
million.

Other assets  decreased by GBP1,295  million to GBP3,944  million,  largely as a
result of decreases of GBP522 million  related to business  disposals and GBP523
million in mark-to-market balances in respect of derivatives.

Long-term assurance business attributable to the shareholder increased by GBP268
million to GBP6,481 million reflecting the after tax profit in the Group's life
assurance businesses for the year of GBP296 million, and a small reduction
reflecting the disposal of the life operations of The National Bank of New
Zealand.


                                 Page 42 of 52


LLOYDS TSB GROUP

Assets (continued)


                                                                                     31 December        31 December
                                                                                            2003               2002
                                                                                            GBPm               GBPm
                                                                                                         
Loans and advances to customers

Domestic:
Agriculture, forestry and fishing                                                          2,025              2,076
Manufacturing                                                                              3,211              3,373
Construction                                                                               1,497              1,482
Transport, distribution and hotels                                                         4,741              4,696
Property companies                                                                         4,577              4,008
Financial, business and other services                                                     9,652              8,352
Personal  : mortgages                                                                     70,750             62,467
          : other                                                                         20,139             16,579
Lease financing                                                                            6,470              7,285
Hire purchase                                                                              4,701              4,342
Other                                                                                      3,351              3,397
Total domestic                                                                           131,114            118,057
International:
Latin America                                                                                557              1,591
New Zealand                                                                                    -             10,447
United States of America                                                                   2,681              3,412
Europe                                                                                     1,981              2,142
Rest of the world                                                                            623                648
Total international                                                                        5,842             18,240
                                                                                         136,956            136,297
Provisions for bad and doubtful debts*                                                    (1,677)            (1,766)
Interest held in suspense*                                                                   (28)               (57)
Total loans and advances to customers                                                    135,251            134,474



*figures exclude provisions and interest held in suspense relating to loans and
advances to banks


Liabilities

Deposits  by banks fell by  GBP1,488  million to  GBP23,955  million.  Disposals
resulted  in a  reduction  of GBP985  million and there was a decrease of GBP651
million in the Group's treasury operations reflecting reduced business volumes.

Customer  deposits  increased by GBP162 million to GBP116,496  million despite a
reduction  of  GBP6,636  million  as a result of  business  disposals.  Sterling
deposits  increased by GBP6,381 million,  or 7 per cent, to GBP103,976  million,
partly reflecting growth of GBP2,530 million in current account credit balances.
Savings and investment accounts balances increased by GBP2,767 million.


                                 Page 43 of 52


LLOYDS TSB GROUP

Liabilities (continued)


                                                                                     31 December        31 December
                                                                                            2003               2002
                                                                                            GBPm               GBPm
                                                                                                         
Deposits - customer accounts

Sterling:
Non-interest bearing current accounts                                                      3,115              2,211
Interest bearing current accounts                                                         27,266             25,640
Savings and investment accounts                                                           55,990             53,223
Other customer deposits                                                                   17,605             16,521
Total sterling                                                                           103,976             97,595
Currency                                                                                  12,520             18,739
Total deposits -  customer accounts                                                      116,496            116,334




Debt  securities in issue  decreased by GBP4,333  million to GBP25,922  million,
largely as a result of a  reduction  of  GBP3,907  million  relating to business
disposals.

Other liabilities  decreased by GBP1,277 million to GBP7,007  million,  of which
GBP761 million related to business disposals,  and GBP447 million to a reduction
in  mark-to-market  balances in respect of  derivatives.  Accruals  and deferred
income  reduced by GBP453  million to  GBP3,206  million  largely as a result of
business  disposals and lower  interest  payable.  The  post-retirement  benefit
liability  increased by GBP62 million to GBP2,139  million.  In  provisions  for
liabilities and charges, deferred tax rose by GBP63 million to GBP1,376 million.
Other  provisions  for  liabilities  and charges  increased by GBP41  million to
GBP402  million  reflecting  the  establishment  of the  provision  for customer
redress.

Subordinated  liabilities  increased  by GBP286  million  to  GBP10,454  million
largely as a result of a new issue of undated loan capital to fund balance sheet
expansion and replace existing issues approaching maturity.

Minority interests decreased by GBP4 million to GBP727 million reflecting the
minority share of profit after tax, and positive exchange rate movements, being
more than offset by the payment of dividends to minority shareholders.

Shareholders' funds were up GBP1,681 million to GBP9,624 million principally due
to retentions.


                                 Page 44 of 52


LLOYDS TSB GROUP

                                        NOTES

1.   Accounting policies and presentation

     During 2003 the Group has implemented the requirements of Urgent Issues
     Task Force Abstracts 37 'Purchases and sales of own shares' and 38 '
     Accounting for ESOP trusts'.  As a result, own shares held, which were
     previously shown as an asset on the balance sheet, are now deducted from
     shareholders' funds. Shares in Lloyds TSB Group plc held by the long-term
     assurance funds are also included in the deduction, and an appropriate
     adjustment is made to liabilities to policyholders.  A prior year
     adjustment, reducing shareholders' funds at 1 January 2002 by GBP2 million,
     has been made to reflect the revised policy.  Profit before tax for the
     year ended 31 December 2003 is unchanged (2002: increased by GBP9 million).
     The impact on the Group's balance sheet at 31 December 2003 has been to
     reduce total assets by GBP164 million (2002: GBP160 million), to reduce
     shareholders' funds by GBP6 million (2002: GBP3 million) and to reduce
     long-term assurance liabilities to policyholders by GBP122 million
     (2002: GBP122 million).

     It has been the Group's policy to defer certain expenses incurred in
     connection with the acquisition of new asset finance and unit trust
     business and charge these costs to the profit and loss account over the
     expected life of the related transactions.  Following a review of the
     Group's accounting policies this treatment is no longer considered to be
     the most appropriate and these costs will now be charged to the profit and
     loss account as incurred.  The effect of this change in policy has been to
     increase profit before tax in 2003 by GBP10 million (2002: GBP2 million).
     A prior year adjustment reducing shareholders' funds at 1 January 2002 by
     GBP28 million has been made.  The effect upon the Group's balance sheet at
     31 December 2003 has been to reduce total assets by GBP27 million (2002:
     GBP37 million) and reduce shareholders' funds by GBP19 million (2002:
     GBP26 million).

     Comparative figures for 2002 have been restated in respect of the above.

     During 2003, Lloyds TSB disposed of a number of its overseas businesses
     including The National Bank of New Zealand and substantially of its
     businesses in Brazil.  An analysis of the Group's profit and loss account
     by continuing operations and discontinued operations is given below.


                                 Page 45 of 52


LLOYDS TSB GROUP


                                                                    Continuing      Discontinued
                                                                    operations        operations            Total
                                                                          2003              2003             2003
                                                                          GBPm              GBPm             GBPm
                                                                                                    
Interest receivable:
  Interest receivable and similar income arising from securities
  debt securities                                                          389                63              452
  Other interest receivable and similar income                           8,484             1,213            9,697
Interest payable                                                         4,129               765            4,894
Net interest income                                                      4,744               511            5,255
Other finance income                                                        34                 -               34
Other income
Fees and commissions receivable                                          2,987               112            3,099
Fees and commissions payable                                              (688)              (34)            (722)
Dealing profits (before expenses)                                          525                35              560
Income from long-term assurance business                                   436                17              453
General insurance premium income                                           535                 -              535
Other operating income                                                     682                12              694
                                                                         4,477               142            4,619
Total income                                                             9,255               653            9,908
Operating expenses

Administrative expenses                                                  4,229               247            4,476
Depreciation                                                               633                13              646
Amortisation of goodwill                                                    39                12               51
Depreciation and amortisation                                              672                25              697
Total operating expenses                                                 4,901               272            5,173
Trading surplus                                                          4,354               381            4,735
General insurance claims                                                   236                 -              236
Provisions for bad and doubtful debts
Specific                                                                   883                63              946
General                                                                      4                 -                4
                                                                           887                63              950
Amounts written off fixed asset investments                                 44                 -               44
Operating profit                                                         3,187               318            3,505

Share of results of joint ventures                                         (22)                -              (22)
Profit on sale of businesses                                                 -               865              865
Profit on ordinary activities before tax                                 3,165             1,183            4,348

Tax on profit on ordinary activities                                                                        1,025
Profit on ordinary activities after tax                                                                     3,323
Minority interests   - equity                                                                                  22
                            - non-equity                                                                       47
Profit for the year attributable to shareholders                                                            3,254

Dividends                                                                                                   1,911
Profit for the year                                                                                         1,343



                                 Page 46 of 52


LLOYDS TSB GROUP

2.   Economic profit

     In pursuit of our aim to maximise shareholder value, we use a system of
     value based management as a framework to identify and measure value in
     order to help us make better business decisions.  Accounting profit is of
     limited use as a measure of value creation and performance as it ignores
     the cost of the equity capital that has to be invested to generate the
     profit.  We choose economic profit as a measure of performance because it
     captures both growth in investment and return.  Economic profit represents
     the difference between the earnings on the equity invested in a business
     and the cost of the equity.  Our calculation of economic profit uses
     average equity for the year and is based on a cost of equity of 9 per cent
     (2002: 9 per cent).

     Economic profit instils a rigorous financial discipline in determining
     investment decisions throughout the Group.  It enables us to evaluate
     alternative strategies objectively, with a clear understanding of the value
     created by each strategy, and then to select the strategy which creates the
     greatest value.


                                                                                                2003             2002
                                                                                                GBPm             GBPm
                                                                                                             
        Average shareholders' equity                                                           8,460           10,672

        Profit attributable to shareholders                                                    3,254            1,790
        Less: notional charge                                                                   (761)            (960)
        Economic profit                                                                        2,493              830


     The notional charge has been calculated by multiplying average
     shareholders' equity by the cost of equity.  The reduction in average
     shareholders' equity in 2003 largely reflects actuarial losses in the
     Group's pension schemes recognised at the end of 2002.

3.   Earnings per share


                                                                                                2003            2002
                                                                                                           
         Basic
         Profit attributable to shareholders                                               GBP3,254m       GBP1,790m
         Weighted average number of ordinary shares in issue                                  5,581m          5,570m
         Earnings per share                                                                    58.3p           32.1p

         Fully diluted

         Profit attributable to shareholders                                               GBP3,254m       GBP1,790m
         Weighted average number of ordinary shares in issue                                  5,599m          5,597m
         Earnings per share                                                                    58.1p           32.0p



                                 Page 47 of 52


LLOYDS TSB GROUP

4.   Tax

     The effective rate of tax was 23.6  per cent compared to an effective rate
     of tax of 29.3 per cent in 2002, and the standard UK corporation tax rate
     in 2003 of 30 per cent.  The lower effective rate of tax in 2003 was
     primarily due to the gain on the disposal of The National Bank of New
     Zealand, which was exempt from taxation.

     A reconciliation of the charge that would result from applying the standard
     UK corporation tax rate to profit before tax to the tax charge, is given
     below:



                                                                                                 2003            2002
                                                                                                 GBPm            GBPm
                                                                                                            
         Profit on ordinary activities before tax                                               4,348           2,618

         Tax charge thereon at UK corporation tax rate of 30%                                   1,304             785
         Factors affecting charge:
         Goodwill amortisation                                                                      9               9
         Overseas tax rate differences                                                             (9)             24
         Non-allowable and non-taxable items                                                      (10)            (28)
         Gains exempted or covered by capital losses                                             (276)            (23)
         Tax deductible coupons on non-equity minority interests                                  (12)            (12)
         Payments to employee trust                                                                 -             (20)
         Life companies rate differences                                                           16              43
         Other items                                                                                3             (12)

         Tax charge                                                                             1,025             766


5.   Investment variance

     In accordance with generally accepted accounting practice in the UK, it is
     the Group's accounting policy to carry the investments comprising the
     reserves held by its life companies at market value. The reserves held to
     support the with-profits business of Scottish Widows are substantial and
     changes in market values will result in significant volatility in the
     Group's embedded value earnings, which are beyond the control of
     management.  Consequently, in order to provide a clearer representation of
     the underlying performance, the results of the life and pensions, and
     general insurance businesses are separately analysed to include investment
     earnings calculated using longer-term investment rates of return.  This
     investment variance represents the difference between the actual investment
     return in the year on investments backing shareholder funds and the
     expected return based upon the economic assumptions made at the beginning
     of the year, and the effect of these fluctuations on the value of in-force
     business. The effects of other changes in economic circumstances beyond the
     control of management are also reflected in the investment variance.  The
     longer-term rates of return for the period are consistent with those used
     by the Group in the calculation of the embedded value at the beginning of
     the period, which were 7.10 per cent for equities and 4.50 per cent for
     Gilts.


                                 Page 48 of 52


LLOYDS TSB GROUP

5.   Investment variance (continued)

     Lloyds TSB General Insurance also holds investments to support its
     underwriting business; these are carried at market value and gains and
     losses included within dealing profits.  Consistent with the approach
     adopted for the life and pensions business, an operating profit for the
     general insurance business is calculated including investment earnings
     normalised using the same long-term rates of return.

     During 2003 there was a positive investment variance of GBP125 million, as
     an increase of 17 per cent in the FTSE All-Share index was partially offset
     by the impact of a reduction in the value of fixed interest investments.

6.   Changes in economic assumptions

     In accordance with the Association of British Insurers' detailed guidance
     for the preparation of figures using the achieved profits method of
     accounting the Group has reviewed the economic assumptions used in the
     embedded value calculations.  The guidance requires that the assumptions
     should be reviewed at each reporting date.

     The main economic assumptions were revised at 31 December 2003 as follows:


                                                                                                2003            2002
                                                                                                   %               %
                                                                                                           
         Risk-adjusted discount rate (net of tax)                                               7.60            7.35
         Return on equities (gross of tax)                                                      7.45            7.10
         Return on fixed interest securities (gross of tax)                                     4.85            4.50
         Expenses inflation                                                                     3.80            3.30


     At 31 December 2003 the review of the assumptions led to changes in all
     of the main economic assumptions.  This has resulted in a charge to the
     profit and loss account in 2003 of GBP22 million, GBP21 million of which
     related to the increase in the rate of expenses inflation from 3.30 per
     cent to 3.80 per cent.

7.   Profit on sale of businesses

     During the year, the Group disposed of a number of its overseas businesses
     and, as a result, a net profit of GBP865 million was recognised in the
     Group's profit and loss account in 2003.  An itemised breakdown is provided
     below.


                                                                                                2003            2002
                                                                                                GBPm            GBPm

                                                                                                          
         French wealth management businesses                                                     (15)              -
         Brazilian businesses                                                                    (41)              -
         The National Bank of New Zealand                                                        921               -
                                                                                                 865               -



                                 Page 49 of 52


LLOYDS TSB GROUP

8.   Free Asset Ratio

     The free asset ratio is a common measure of financial strength in the UK
     for long-term insurance businesses.  It is the ratio of assets less
     liabilities (including actuarial reserves but before the required
     regulatory minimum solvency margin) expressed as a percentage of the
     liabilities.  At 31 December 2003, the free asset ratio of Scottish Widows
     plc was an estimated 13.5 per cent, compared with 12.2 per cent at 31
     December 2002.  After adjusting for the required regulatory minimum
     solvency margin, the Scottish Widows plc ratio, expressed as a percentage
     of total assets, was an estimated 8.3 per cent at 31 December 2003,
     compared with 7.3 per cent at 31 December 2002.

9.   Reconciliation of movements in shareholders' funds


                                                                                                2003            2002
                                                                                                GBPm            GBPm
                                                                                                           
         Profit attributable to shareholders                                                   3,254           1,790
         Dividends                                                                            (1,911)         (1,908)
         Profit (loss) for the year                                                            1,343            (118)
         Currency translation differences on foreign currency net investments                    118              (3)
         Actuarial losses recognised in post-retirement benefit schemes                           (4)         (2,331)
         Issue of shares                                                                          45             139
         Movements in relation to own shares                                                      (2)            (70)
         Goodwill written-back on sale of businesses                                             181               -
         Net increase (decrease) in shareholders' funds                                        1,681          (2,383)
         Shareholders' funds at beginning of year                                              7,943          10,356
         Prior year adjustment at 1 January 2002 (page 45, note 1)                                 -             (30)
         Shareholders' funds at end of year                                                    9,624           7,943



                                 Page 50 of 52


LLOYDS TSB GROUP

10.  Dividend

     A final dividend for 2003 of 23.5p per share (2002: 23.5p), will be paid on
     5 May 2004, making a total for the year of 34.2p (2002: 34.2p).

     Shareholders who have already joined the dividend reinvestment plan will
     automatically receive shares instead of the cash dividend.  Shareholders
     who have not joined the plan and wish to do so may obtain an application
     form from Lloyds TSB Registrars, The Causeway, Worthing, West Sussex,
     BN99 6DA (telephone 0870 6003990).  Key dates for the payment of the
     dividend are:



                                                                           
     Shares quoted ex-dividend                                            17 March

     Record date                                                          19 March

     Final date for joining or leaving the dividend reinvestment plan      7 April

     Final dividend paid                                                     5 May



11.  Other information

     The financial information included in this news release does not constitute
     statutory accounts within the meaning of section 240 of the Companies Act
     1985. Statutory accounts for the year ended 31 December 2003 were approved
     by the directors on 5 March 2004 and will be delivered to the registrar
     of companies following publication on 3 April 2004.  The auditors' report
     on these accounts was unqualified and did not include a statement under
     sections 237(2) accounting records or returns inadequate or accounts not
     agreeing with records and returns) or 237(3) (failure to obtain necessary
     information and explanations) of the Companies Act 1985.

     A report on Form 20-F will be filed with the Securities and Exchange
     Commission in the United States.


                                 Page 51 of 52


LLOYDS TSB GROUP

                                     CONTACTS


                    For further information please contact:-


                                 Michael Oliver
                         Director of Investor Relations
                              Lloyds TSB Group plc
                                 020 7356 2167
                   E-mail: michael.oliver@ltsb-finance.co.uk


                                Terrence Collis
                   Director of Group Corporate Communications
                              Lloyds TSB Group plc
                                 020 7356 2078
                    E-mail: terrence.collis@lloydstsb.co.uk


Copies of this news release may be obtained from Investor Relations, Lloyds TSB
Group plc, 25 Gresham Street, London EC2V 7HN.  The full news release can also
be found on the Group's website - www.lloydstsb.com.

Information about the Group's role in the community and copies of the Group's
code of business conduct and its environmental report may be obtained by writing
to Public Affairs, Lloyds TSB Group plc, 25 Gresham Street, London EC2V 7HN.
This information is also available on the Group's website.


                                 Page 52 of 52




                                   Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                              LLOYDS TSB GROUP plc
                                  (Registrant)


                                    By:       M D Oliver

                                    Name:     M D Oliver
                                    Title:    Director of Investor Relations

Date: 08 March 2004