Lloyds reports £10 billion loss for 2008

Lloyds Banking Group said it had not finalised details of its plan to put billions of pounds of assets into a UK government-backed…

Lloyds Banking Group said it had not finalised details of its plan to put billions of pounds of assets into a UK government-backed insurance scheme, as it unveiled a £10 billion loss for 2008.

Lloyds said this morning that HBOS - the mortgage lender it took over in January - suffered a 2008 statutory loss of £10.8 billion ($15.4 billion) as it was hit by £9.9 billion of losses on bad loans and credit market losses.

Lloyds said the former Lloyds TSB business made a statutory profit of £807 million, down from £4 billion, as its impairments jumped to £3 billion.

HBOS's loss was in line with guidance Lloyds gave two weeks ago in a profit warning. It indicates that the combined group made a statutory loss of £10.1 billion, compared with a combined profit of £9.4 billion in 2007.

Lloyds said talks with the UK government on an asset insurance scheme "are progressing and are well advanced".

Chief executive Eric Daniels said he would provide an update "reasonably shortly" and declined to comment further. The bank had been expected to announce it was putting over £250 billion of assets into the plan.

Its shares were called to open down 5 per cent, having rallied 31 per cent on Thursday on optimism that terms of the plan would be more favourable than earlier expected.

The government owns a 43 per cent stake in Lloyds, after supplying £17 billion under a rescue plan in October.