Lloyds expected to report £4bn loss
Thursday 23 February 2012
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.
- 1 What happens to your body when you give up sugar?
- 2 Licence fee: What is the BBC charge – and how will the changes affect you?
- 3 This is what the photographer has to say about the picture of a weasel riding a woodpecker
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
Pornhub turns masturbation into energy in bid to save the planet
The 'sex selfie stick' lets you FaceTime the inside of a vagina
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...