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Lloyds Banking Group posts £3.5 billion loss

Lloyds Banking Group posts £3.5 billion loss

Category: Banking

Updated: 24/02/2012
First Published: 24/02/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Lloyds Banking Group has announced losses of £3.5 billion for 2011, with payment protection insurance (PPI) payments making up the bulk of the shortfall.

It represents an unwelcome turn in fortunes for the 41% state-owned bank, after it posted profits of £281 million in 2010.

The bank has been particularly affected by the High Court's decision in April last year to order providers to settle claims made by customers who thought they were mis-sold PPI.

Lloyds revealed earlier this year that it had set aside some £3.2 billion to settle claims.

In its results, the bank said it has made savings of £2 billion from integration and that is has commenced with other 'simplification initiatives.'

The activities make up part of the group's current restructuring which has seen thousands of jobs cut and the size of its branch network fall.

It also plans to halve the number of international locations it operates within from 30 to 15 in the next two years.

"In 2011, we established our longer term strategy for the Group, acted quickly and decisively to mitigate the effects of a challenging environment and put in place the right foundations to deliver on our objectives over the next three to five years, whilst continuing to support the UK economy," said Antonio Horta-Osorio, the group's chief executive.

Lloyds said that it had provided £45 billion in lending to UK businesses in 2011, with £12 billion going to small and medium-sized companies – exceeding its Project Merlin target as set by the Government in the process.

It has also pledged to make another £12 billion available to small and medium sized businesses this year.

The group completed £28 billion of new mortgage business in 2011, achieving a market share of approximately 20% of gross new residential mortgage lending.

"We are committed to supporting the UK housing market and first-time buyers in particular," said Lloyds.

"We advanced more than £5.6 billion of new lending to first-time buyers in 2011, helping over 52,000 customers own their first homes. Our market share of new first-time buyer business was approximately 24% by value in 2011."

It also said that its Halifax brand is a 'leading lender in the affordable housing sector, with a dedicated product range designed for borrowers seeking shared equity or shared ownership schemes'.

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