Lloyds reports £6.3 billion loss
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Lloyds Banking Group has reported an operating loss of £6.3 billion for 2009.
The reported loss was less than experts expected, and slightly down on the previous year’s £6.7 billion reported loss. Impairment losses increased £9.1 billion to £24 billion for the year. The firm made a profit of £1 billion on a pre-tax profit basis. Total assets dropped by 9% to £1 billion, with a 7% decrease in loans and advances to customers.
The UK life, pensions and investments division saw a 25% drop in profits, from £826m to £617m in 2009.
The firm says profit in this division was significantly impacted by the general contraction in the life, savings and investments market but the reduction also reflects the integration of the intermediary sales forces and the withdrawal of a number of legacy HBOS products with poor returns.
A pre-tax loss of £3.3 billion was also reported for its wealth and international business, a new division created in 2009 which includes Scottish Widows Investment Partnership as well as the group’s offshore and private banking operations. (article continues below)
In its retail business, total income in mortgages and savings dropped 27% to £3.6 billion in 2009 from £5bn the previous year. Impairment losses on retail loans and advances have increased by 14% to £4.2 in 2009.
Payment protection insurance income dropped 4% to £349m last year. The firm says the decrease is a result of the market wide move to monthly premiums on payment protection.
The results reveal that Lloyds will launch its new bancassurance proposition in mid-2010 following on from the integration of the Scottish Widows and Clerical Medical sales forces last year.
Group chief executive Eric Daniels says the economic performance last year was “worse than most expected”, but adds: “Although we are forecasting a slow, below trend, economic recovery, the group is successfully addressing the near term challenges and is well positioned to deliver value for our customers and shareholders.
“As a result, the financial performance of the group’s continuing businesses is expected to improve significantly in 2010 and beyond.”
The results follow that of Royal Bank of Scotland, who yesterday reported a £3.6 billion loss.
Earlier this week Daniels waived his right to a £2.3m bonus for 2009, after RBS and Barclays bosses last week waived their bonuses.
