Lloyds expected to report £4bn loss

 

Part-nationalised Lloyds Banking Group will move to reassure taxpayers that it remains on the road to recovery tomorrow despite expected losses of around £4 billion for last yea

The losses, which compare to a £281 million profit the previous year and are driven by a £3.2 billion hit to tackle the payment protection insurance scandal, are twice the size of those at fellow state-backed bank Royal Bank of Scotland.

The 41% state-owned bank has some way to go before delivering a decent return to the taxpayer as, at 36p, its share price is still nearly half the price tag of 63p a share paid by the Government for its stake.

In contrast to RBS, Lloyds, which has no investment banking arm, has managed to duck the bonus row so far, after its chief executive Antonio Horta-Osorio waived his bonus following an extended absence due to ill health.

However, there were calls earlier this week for the Portuguese boss to repay some of his signing-on award after the lender decided to strip 13 directors, including former chief executive Eric Daniels of about £2 million in bonuses.

But like RBS, Lloyds is going through a massive overhaul, which will include around 15,000 job cuts and the EU-enforced sale of 632 branches - dubbed Project Verde.

The City will be looking for an update on how much this restructuring will cost the bank, which owns more than 2,000 branches in the UK, as well as any progress made on completing the sale of its branches to preferred bidder the Co-operative Bank.

Robert Law, senior banks analyst at Nomura, has predicted the so-called Project Verde sale will be a flop.

"The Project Verde disposal is likely to prove disappointing and involve a book value loss for Lloyds, as well as earnings dilution," he said.

"Lloyds named the Co-operative Bank as the preferred buyer last year, but has maintained work on an initial public offering as an option in case agreement is not concluded."

However, he said the core high street businesses were "relatively strongly positioned, with healthy market shares".

Mr Horta-Osorio, who returned to work last month after taking two months off due to severe sleep problems, said he acknowledged that his absence had an impact both "inside and outside the bank, including for shareholders".

Mr Horta-Osorio could have received a maximum of 225% of his annual salary, which equates to a total of £2.4 million, but chose not to take the payment.

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there