High-street bank Lloyds TSB has shrugged off a £200 million investment loss with an upbeat view on current trading. Its second half profit will be propped up by £675 million made from selling two subsidiary businesses.

The bank's investment losses are linked the US sub-prime mortgage crisis. The negative impact on its balance sheet has been offset by selling its Lloyds TSB Registrars business and the Abbey Life insurance book.

'Whilst no bank has been immune from the recent turbulence, the relatively limited impact of the market dislocation on the group has been more than offset by the significant profit on the sales of non-core businesses,' said Lloyds TSB chief executive Eric Daniels.

The company claims to have benefited from a lower-risk strategy than its UK rivals, choosing to be more selective over who it lends money. Barclays and Royal Bank Scotland both recently reported higher losses.

The credit crunch continues to affect banking businesses, with Swiss group UBS today writing off another £5 billion on investments based on loans to high-risk US borrowers.

Lloyds TSB's day-to-day banking operations remain healthy. It reported a growing share of the current account market and has seen 'significantly improved deposits' among its savings range.

But profits will be dampened by having to repay overdraft fees to customers, which cost it £36 million at the end of June. A similar charge is expected for the second half of the year.

It will also feel the pain of paying out £110 million extra in insurance claims relating the floods in June and July.

Collins Stewart analyst Alex Potter called Lloyds TSB a 'high-yielding safe haven'. It is popular among investors seeking an income with the dividend currently paying out the equivalent of 7.4% interest.

Shares in the bank slipped 1% to 482.5p in early trade on Monday.