The newly formed Lloyds Banking Group says HBOS made a £10.8bn pre-tax loss last year while Lloyds TSB saw its own profit tumble 80% to £807m.
The group, which is 43%, owned by the Government, formed last month after Lloyds TSB was allowed to acquire HBOS.
The HBOS loss, which outstrips the £7.9bn underlying loss reported by Royal Bank of Scotland yesterday (February 26) is a result of nearly £10bn of bad loans.
Lloyds TSB’ profit dip was described as a “resilient underlying business performance” in the circumstances.
Sir Victor Blank, chairman of the group, says despite the losses at HBOS it has acquired a franchise that brings extensive distribution, a large customer base, good people and excellent brands”
“We know the short-term outlook for the enlarged group is challenging. Whenever economic conditions do begin to normalise, however, we believe we will be in a very strong position to reap the benefits. Our strong franchise across the whole range of product lines will enable us to do just that,” he says.