adminand as losses on bad loans in Ireland continued to pile up.
The loss compared with a £1,3 billion profit reported a year ago and even stripping out the one-off £3,2 billion Lloyds had already earmarked to cover mis-selling liabilities its results deteriorated versus 2010.
The bank’s adjusted pretax profit was £1,1 billion, down from £1,6 billion reported a year earlier but broadly in line with the £1 billion expected by analysts, according to the average forecast on Thomson Reuters I/B/E/S.
“Our guidance given in our Strategic Review announcement on 30 June 2011 remains unchanged,” the company said in a statement yesterday. We continue to monitor economic conditions closely, notably in the UK and eurozone.”
The deterioration came after the bank’s net interest margin shrank to 2,07 percent from 2,12 percent this time last year. – Reuters.
Lloyds, 41-percent owned by the British government after a credit crisis bail out, said the lower profitability on lending reflected continued high funding costs, repayment of government and central bank facilities, and competitive deposit markets.
The bank cut impairment charges on bad loans by 17 percent to £5,4 billion pounds although the improvement would have been much better had it not been for a further deterioration in Ireland.
Losses on bad loans at its Irish operations hit £1,8 billion pounds in the first six months of the year, 14 percent worse than the figure of just under £1,6 billion pounds reported a year ago.
In terms of risks posed by a worsening euro zone sovereign debt crisis, Lloyds said its aggregate direct exposure to the national and local governments of Spain, Italy, Portugal, Ireland, Greece and Belgium totalled 189 million pounds. – Reuters.
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