Lloyds Banking Reports a $2.2 Billion Annual Loss
Baku, March 5 (AZERTAC). The Lloyds Banking Group reported a net loss on Friday of £1.4 billion, or $2.2 billion, partly because it was forced to set aside billions of dollars to compensate customers that wee inappropriately sold financial products.
Lloyds, which is 39 percent owned by the British government after receiving a bailout during the financial crisis, said it had made a further £1.9 billion of extra provisions during the fourth quarter related to a number of wrongdoings.
Amid reports that the British government may soon starting selling parts of its stake in the British bank, Lloyds said it was continuing to dispose of noncore assets, as well as refocusing on the bank`s main retail division.
Mr. Horta-Osório`s bonus will depend on the bank`s ability to sell the stake. The chief executive line for a £1.5 million bonus for 2012 that will be paid in deferred shares that he will not be able to access until 2018. To receive the bonus, the British government also must have sold at least one-third of its holding in the bank above 61 pence a share, which is what local taxpayers paid to bail out the bank in 2008. Lloyd shares are currently trading at around 54 pence, having risen 56 percent over the 12 twelve months.
Earnings were weighed down by a series of extra charges, including an additional £1.5 billion, or $2.3 billion, charge in the three months through Dec. 31 for inappropriately selling insurance to customers. The extra provision takes the total amount that Lloyds has set aside to compensate consumers to £6.8 billion.
Lloyds also more than tripled the amount during the fourth quarter of the year that it will use to compensate small businesses that were inappropriately sold interest-rate hedging products. The figure now stands at £400 million, up from £90 million.
The British bank also said that it continued to cooperate with local and international regulators over the investigation into the manipulation of global benchmark interest rates. Other British banks, including Barclays and the Royal Bank of Scotland, have been fined millions of dollars in connection to the rate-rigging scandal.
``It is currently not possible to predict the scope and ultimate outcome of the various regulatory investigations,`` Lloyds said in a statement.
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