Lloyds Banking Group posts £6.3 billion loss

Category: Economy
Date: 2/26/2010

Lloyds Banking Group has announced that it made an operating loss of £6.3 billion last year.

The group has been expected to make a loss and the contraction was actually slightly smaller than analysts had expected – as was the case with RBS yesterday – and an improvement on the loss of £6.7 billion in 2008.

A large proportion of Lloyds' losses stem from bad loans it took on when it purchased Halifax Bank of Scotland (HBOS) last year.

These impairments, which amounted to £24 billion, fell in the second half of 2009 and are expected to decline further in 2010.

The takeover of HBOS and its myriad of bad loans was the catalyst for the group being bailed out by the Government.

On a pre-tax basis, the group made a profit of £1 billion, results showed. Total income rose by 12 per cent in 2009, while costs fell by five per cent.

Eric Daniels, group chief executive, said 2009 had proved to be another challenging year for the financial services industry, both in the UK and around the world.
"Despite the tough market conditions, our core businesses have performed well," he commented.
Mr. Daniels said Lloyds expects a slow, below trend, economic recovery but that the Group is addressing challenges and is well positioned to deliver value to customer and shareholders.

"As a result, the financial performance of the Group's continuing businesses is expected to improve significantly in 2010 and beyond."

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