London: Britain's largest retail bank, Lloyds TSB, on February 15 said that it was axing 3,000 jobs after profits fell eight per cent in 2001, squeezed by its exposure to the Argentina economic crisis.

Pre-tax profit fell to 3.55 billion Pounds in 2001, even though total revenue increased 10 per cent to 9.5 billion Pounds.

The economic crisis in Argentina knocked 100 million Pounds off the profit figure, while provisions for bad and doubtful debt rose 28 per cent to 692 million Pounds.

The bank also announced 3,000 net job cuts, almost four per cent of its global workforce, to try to trim some of the fat from its business. Some 5,000 jobs are to go in central and support areas, while 2,000 jobs are to be created in customer sales and services.

However, chief executive Peter Ellwood insisted the business was in good shape. "Asset quality remains good, our total non-performing debt is at similar levels to that seen last year and we remain well positioned to combat any potential downturn in the economy," he said.

"There will be some disappointment that pre-tax came in below the bottom of the range and ascribing it to volatile financial markets is a cop-out," he said.

"The halo has slipped and the share has rather lost its way." But Lloyds said that it was set fair to ride out the current downturn. Periods of economic slump often saddle banks with increasing bad debts, as loans to failed businesses go unredeemed.

Economists are watching the current set of banking results to gauge the extent of the impact of the slowdown on the financial sector. Barclays on February 14 reported that its provisions had topped 1 billion Pounds.