Lloyds reports £3.5bn loss
Lloyds said 2012 revenue would fall and pushed back a key financial target as the part state-owned British bank joined rival Royal Bank of Scotland in posting a hefty loss for 2011.
Lloyds reported an annual loss of £3.54bn, having made a profit of £281m in 2010.
“We expect the external environment to remain challenging in 2012, with a subdued economy, continued high levels of regulatory scrutiny and political uncertainty relating to the banking sector, and the continued potential for downside effects from financial market volatility and instability in the euro zone,” Chief Executive Antonio Horta-Osorio said.
It forecast income would fall further this year, after dropping 10 percent in 2011 to 21.2 billion pounds.
Its banking net interest margin would drop to near 1.93 per cent after falling 14 basis points to 2.07 per cent in 2011 due to high funding costs, it added.
Horta-Osorio, who joined Lloyds at the start of last year, said 2011 was a year of transition for the bank as it attempts to strengthen its balance sheet, decrease risk and cut costs.
Horta-Osorio pushed back his targets to boost income and profitability to later than 2014, but said all of the medium-term targets he set in a review in June are achievable.
More positively, bad debts at the bank fell 26 percent on the year to £8.1bn with another £3.2bn of losses on Irish loans.