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One-off gain helps Lloyds to good profit
By Robert Barr |
February 27, 2010, Saturday
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Print Edition
Print Edition
LLOYDS Banking Group Plc yesterday reported a full-year net profit of 2.8 billion pounds (US$4.3 billion) as a goodwill gain helped offset soaring impairment charges.
The bailed-out bank made a pretax loss of 6.3 billion pounds, however, worse than analysts' consensus forecast of 6.1 billion pounds.
For the year ending December 31, the pretax loss narrowed from 6.7 billion pounds in 2008 before Lloyds TSB took over Halifax/Bank of Scotland in January 2009. All the comparisons assume that the businesses were combined in 2008.
Total impairments, largely inherited from HBOS, rose from 14.9 billion pounds to 24 billion pounds.
"We believe the group's overall impairment charge has now peaked, with a significant reduction expected in 2010," said Group Finance Director Tim Tookey.
Total income, net of insurance claims, rose 12 percent to 24 billion pounds.
The bank booked a goodwill credit of 11.1 billion pounds related to the acquisition of HBOS, because the fair value of the assets was greater than the amount paid.
Following the HBOS acquisition, Lloyds was bailed out by the government, which now holds a 41 percent stake.
Last year, Lloyds also raised 13.5 billion pounds in Britain's largest-ever rights issue.
"The substance and outlook should delight the market," said analyst Ian Gordon at Exane BNP Paribas.
He noted improvements in margins and synergies.
The bailed-out bank made a pretax loss of 6.3 billion pounds, however, worse than analysts' consensus forecast of 6.1 billion pounds.
For the year ending December 31, the pretax loss narrowed from 6.7 billion pounds in 2008 before Lloyds TSB took over Halifax/Bank of Scotland in January 2009. All the comparisons assume that the businesses were combined in 2008.
Total impairments, largely inherited from HBOS, rose from 14.9 billion pounds to 24 billion pounds.
"We believe the group's overall impairment charge has now peaked, with a significant reduction expected in 2010," said Group Finance Director Tim Tookey.
Total income, net of insurance claims, rose 12 percent to 24 billion pounds.
The bank booked a goodwill credit of 11.1 billion pounds related to the acquisition of HBOS, because the fair value of the assets was greater than the amount paid.
Following the HBOS acquisition, Lloyds was bailed out by the government, which now holds a 41 percent stake.
Last year, Lloyds also raised 13.5 billion pounds in Britain's largest-ever rights issue.
"The substance and outlook should delight the market," said analyst Ian Gordon at Exane BNP Paribas.
He noted improvements in margins and synergies.
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