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 Barbarians vs Samoa interrupted by sprinklers as fans criticise lack of Wi-Fi and poor seating at West Ham's Olympic Stadium
- 2 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 3 Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
- 4 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Caitlyn Jenner car crash: Driver who died in collision sued by surviving passengers for $18.5m
Watch the Supermoon live: How to see the brightest Moon of the year tonight
Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Turkey duped the US, and Isis reaps rewards
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...