Revenue at Lloyds returns to form
By Robert Barr |
August 5, 2010, Thursday
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Print Edition
Print Edition
PART-NATIONALIZED Lloyds Banking Group Plc reported yesterday that first-half net profits fell 92 percent from a year ago, when it booked a big one-off gain, but revenue grew and bad loans were almost halved from a year ago.
Lloyds, formed last year when Lloyds TSB took over Halifax/Bank of Scotland, said net profit was 596 million pounds (US$950 million), down from 7.1 billion pounds a year earlier when the company benefited from an 11.2 billion pound exceptional goodwill gain on the acquisition of HBOS.
Provisions for bad loans and other losses dropped from 13.4 billion pounds to 6.55 billion pounds.
Before taxes, the bank made a profit of 1.6 billion pounds compared to a loss of 4 billion pounds a year ago and 6.3 billion pounds in the second half of 2009. Revenue rose 5 percent to 12.5 billion pounds.
Comparisons with 2009 assume that Lloyds had control of HBOS for all the first half.
Shares in Lloyds, in which the government holds a 41 percent stake after bailing it out during the credit crisis, were up 3.4 percent at 74.34 pence in early trading on the London Stock Exchange.
Danny Clarke, analyst at Shore Capital in London, said the bank's report was "very strong" and he upgraded his recommendation from "hold" to "buy."
Lloyds Chief Executive J. Eric Daniels was upbeat about the prospects, saying: "Based on our economic outlook and the current regulatory context we would expect to see a smaller, more productive balance sheet and are expecting returns on equity of more than 15 percent over the medium to longer term."
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