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For much of the past decade, Lloyds TSB has made a virtue of boring investors silly. At a time when rivals were cantering off into new products and far corners of the globe, Eric Daniels stuck to the tedious business of shoring up the bank’s run-down UK retail, insurance and corporate banking arms. Selling overseas assets to protect the dividend, the doleful chief executive made only minor sorties into anything out of the ordinary.

The bank’s first-half results on Wednesday showed the benefits of being dull but dependable. The statutory numbers featured the now-obligatory writedowns on structured products, a third worse since May, and a battered insurance portfolio. But the underlying business is well-funded – Lloyds is easily the top deposit-taker in the UK – and in good shape. Group profits before tax were up 11 per cent, driven by income growth 4 percentage points better than cost growth. A small interim dividend rise signals that Mr Daniels, never one to build empires, intends to keep his head down and trade through the downturn.

The snag in the plan is that having offloaded decent retail banking franchises in Brazil and New Zealand, Lloyds now finds itself almost entirely leveraged to a single economy. But the bank is making gains at the expense of stricken rivals. It took almost a quarter of net new mortgages so far this year, for example, with a low average loan-to-value ratio. Losses across the portfolio have yet to mount – in fact, the retail impairment charge as a percentage of average lending was lower than in the first half of last year.

Bracketing the Black Horse with knock-kneed rivals like Alliance & Leicester is unfair. Lloyds’ shares are down 32 per cent this year, more than the UK sector. Yes, things will get worse, but if any bank has the form to emerge in the winners’ enclosure, it is this one.

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