Lloyds Banking Group reports first half loss
Lloyds Banking Group is the latest bank to announce its first half results and the bank, which is 43% owned by the taxpayer, has slumped to a £4 billion loss.
While the bank had warned investors that it would make a loss this year - it wasn‘t as severe as many analysts had originally feared.
However, the bank has been forced to write off £13.4 billion in bad debts (over 5 times the £2.5 billion reported a year ago), primarily due to irresponsible lending by HBOS - the bank it rescued last autumn.
Lloyds warned earlier this year that bad debts would ‘rise significantly’ this year - analysts had forecast bad loans to come in at around £11 billion.
In the meantime, the combined banking giant has axed nearly 9,000 jobs already this year - because of the level of overlap between the two banks.
Sir Victor Blank, Lloyds’ chairman, announced his resignation in May after he and chief executive, Eric Daniels, faced criticism following the takeover. Sir Victor is to be replaced by banking veteran Sir Win Bischoff later this year.
Meanwhile, commenting on today’s figures, Eric Daniels said: “Our first half loss was driven by the high levels of impairment. The core business delivered a resilient performance, despite the weak economy.”
“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,” Daniels added.
Royal Bank of Scotland is due to report its H1 figures later this week, while Barclays and HSBC, which have both turned down financial help from the Government, have already announced combined half-year profits of £6 billion.
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