The banking group says mounting debts at HBOS, acquired by Lloyds in January, led to an impairment charge of £13.4bn, pushing the group in to the red from a £3bn profit in the same period last year.
Lloyds, now 43% owned by the taxpayer, has been cutting costs and jobs after taking on HBOS’s bad loans. Last month, it announced a further 1,200 job cuts, pushing the total cut to about 8,200 since the acquisition was completed in January.
It is also to close all of its Cheltenham & Gloucester branches article in November putting over 900 jobs at risk.
Despite the losses, the group’s chairman, Victor Blank, says he has “a great belief in the exciting prospects for the Group going forward”.
“We are very strongly positioned for long-term success with a highly experienced management team focused on delivering the significant potential of the new business,” he says.
Stephen Timms, chief secretary to the Treasury, who is understood to be taking on the role of Minister for Communications, told the BBC that Lloyds is “starting to do the things we need banks to be doing” in terms of mortgage lending and granting start-up business accounts.
Lloyds has restructured its marketing department following the HBOS acquisition including bringing in former Visa marketer Joe Clift as head of brand/customer marketing to work under group marketing director Nigel Gilbert.
The banking is also reviewing its media account with Zenith and MEC on the shortlist.