Part-nationalised Lloyds Banking Group today revealed its first annual profit since being bailed out at the height of the financial crisis.
The group, which is 41% owned by the taxpayer, reported pre-tax profits of £2.2 billion - a marked improvement on the £6.3 billion loss in 2009.
The bank's bad debt losses narrowed in 2010 to £13 billion, from £23 billion the previous year, but it saw an increase in international impairment charges driven by the impact of the Irish debt crisis.
Lloyds has already revealed its bonus plans, with outgoing chief executive Eric Daniels being awarded £1.45 million for 2010.
The 45% reduction in impairment charges came despite a "deterioration" in some of the group's international businesses, which was offset by improvements in the retail and wholesale divisions at the bank.
The wealth and international division increased losses before tax to £5.2 billion, compared to £3.3 billion in 2009 - which was due to the £4.3 billion impairment charge in Ireland.
The bank inherited most of the disastrous losses on Irish property from HBoS, which it rescued at the height of the financial crisis in 2008.
The economic environment in Ireland hit crisis point in the last quarter of 2010 and resulted in multibillion pound bailouts from the EU and IMF.
But the retail - or high street - division performed well in 2010, opening 1.9 million current accounts in 2010, as well as five million new savings accounts.
The group said it extended £30 billion of gross mortgage lending including to 50,000 first-time buyers.
The bank also provided £49 billion gross lending to UK businesses, of which £11 billion was to small and medium sized enterprises.
A further blow came last week when lender Halifax revealed it would have to pay £500 million in compensation after it admitted confusing 600,000 customers about whether a cap on its standard variable rate mortgage applied to them.
Yesterday, fellow taxpayer-backed player RBS said its recovery was ahead of schedule as it slashed annual losses in 2010. RBS, which is 83% owned by the taxpayer, posted losses of £1.1 billion in 2010 against a £3.6 billion loss in 2009.
Lloyds Banking Group chief executive Eric Daniels said today that he may not take his £1.4 million bonus, despite returning the company to profit.
Hailing "a very good set of results", Mr Daniels said: "Our job is to make the bank as robust as possible, continue the profit trajectory and continue to enhance the value for the shareholder, including the taxpayer."
He revealed he was unsure whether to accept his annual bonus, adding: "I don't determine my own bonus - this is something the board and the committee decided.
"Based on the strong results this year, they've decided the management - and that includes me - deserve bonuses.
"But they are also deferred and paid in shares and they won't go out until at least 2013, so I think I'll make my decision at that time."
Mr Daniels told the BBC Radio 4 Today programme that he inherited a "troubled portfolio" after Lloyds' takeover of HBOS at the height of the financial crisis.
He added: "You're going to see some swings and roundabouts, but it was a very, very good year.
"Probably the most pleasing part was we also reduced risk... (we) repaid a lot of central bank funding last year - £61 billion."
Mr Daniels, who retires as chief executive on Monday, added: "It has been an honour and privilege to have led Lloyds. The bank is in good shape and has a very strong trajectory."