Lloyds eyes return to profit
Part-nationalised Lloyds Banking Group today flagged up a return to profit this year after seeing lower than expected bad debts.
The group, which is 41-per-cent taxpayer-owned after rescuing ailing HBOS, believes it will be "profitable on a combined business basis" in 2010.
Lloyds racked up £24 billion in bad debts during 2009 - mainly due to the toxic debts in the HBOS loan book - which led to a £6.3 billion loss last year.
But the group said today: "Impairment provisions are currently trending at lower levels than anticipated and as a result the group now expects to deliver a better impairment performance than previously guided, in both the retail and corporate businesses, in 2010."
Although Lloyds said predictions of a return to the black were based on current expectations for the economy and regulatory burdens, the bank is "pleased" with its performance so far.
The bank, which has three million small shareholders, reported "strong" trading in the first 10 weeks of 2010 and has clamped down on costs after the HBOS merger.
In February's annual results, it increased annual cost saving targets to £2 billion by the end of next year as a result of the takeover.
Bad debts in the second half of 2009 were around 20% lower than in the first six months of last year and Lloyds had previously guided a similar rate of improvement during 2010.
But the bank's impairment charges are falling at a faster rate than expected, improving profitability.
The unexpected update will be a boost for chief executive Eric Daniels, who has defended the HBOS deal for more than a year to former Lloyds TSB shareholders who have seen dividends cut and the Government step in as a result of the takeover.
Mr Daniels waived a £2.3 million bonus due for his 2009 performance to stave off another row over bank pay last month.
In November it carried out a £20 billion-plus fundraising to strengthen finances and avoid a taxpayer-backed insurance scheme for bad debts, which would have seen the public stake rise further still.
European regulators have ordered Lloyds to sell around a fifth of its UK branch network - including the TSB brand and Cheltenham & Gloucester - in return for state support.
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Germanwings plane crash: Video shows co-pilot Andreas Lubitz learning to fly as a teenager
- 3 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 5 WrestleMania 31 results: Seth Rollins stuns WWE as he cashes in Money in the Bank contract to claim title from Brock Lesnar
East 17 bandmember Brian Harvey in 'very desperate situation’
Vladimir Putin says Russia will fight for the right of Palestinians to their own state
Ohio Democrat Teresa Fedor speaks out during abortion debate to reveal she has been raped – and is interrupted by laughter from Republicans
Children take eight Isis captives to be beheaded in latest propaganda video
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£32000 - £38000 per annum + benefits: Ashdown Group: A highly successful, inte...
£20000 - £35000 per annum: Recruitment Genius: This multi-award winning foreig...