Lloyds Banking Group has posted a huge loss of £4 billion in its results for the first six months of 2009, with much of the damage caused by its takeover of HBOS in January.
The figures compare poorly with a £2.8 billion profit in the same period last year.
The group said that a combination of a steep decline in the UK's GDP, accompanied by a sharp drop in residential and property prices, as well as writing down the value of assets, was to blame for the results.
In its report, Lloyds detailed how it has taken a charge of £13.4 billion in the six month period, with HBOS assets responsible for 80 per cent of this.
The group's results come after Barclays, HSBC and Northern Rock published their accounts earlier in the week. Performance has been mixed, with Barclays and HSBC both reporting profits of almost £3 billion, while Northern Rock suffered a £724 million deficit.
Lloyds said that that its core business had been resilient and it expected performance to improve in the second half of 2009. Gross mortgage lending totalled £18 billion in the first half of the year – 27 per cent of gross lending – with one million new current accounts and 2.3 million savings accounts opened.
Furthermore, 60,000 new commercial business accounts were opened, a 24 per cent share of all new start-ups.
"We are successfully managing the short term issues and are well positioned to outperform over the medium term, providing value to our customers and shareholders," said J Eric Daniels, group chief executive.
The bank, which is already 43 per cent in public ownership, said it was in discussions with the Government over the Asset Protection Scheme, which would protect against further losses caused by bad loans, although such a move may see the Government increase its stake in the bank.
Lloyds said it expected to see an upturn in the economy next year, and aimed to deliver a modest income growth within two years.
"We are very strongly positioned for long term success," maintained the group's chairman, Sir Victor Blank.
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