Lloyds returns to profit

 

British retail bank Lloyds returned to profit in the first half of 2010 from a loss a year earlier after lower bad debt charges boosted earnings, but impaired loans in Ireland continued to rise.

The parent company of Bank of Scotland (Ireland) said today it made a pretax profit of £1.603 billion for the six months ending June, compared with a loss of £3.96 billion a year earlier.

In Ireland, total impaired loans rose 20 per cent in the first half of the year, making impaired loans 43.8 per cent of £26.7 billion of loans and advances in the country at the end of June. Impairment provisions in the country amounted to £4.86 billion, rising from £3.6 billion on December 31st.

The group said Irish economic conditions remained challenging with evidence of further falls in property prices and rising unemployment.

Total impairments for the group fell to £6.55 billion from £13.4 billion a year ago against the backdrop of a stabilising economy, while lower costs also helped boost the company's profits.

"We expect to deliver strong medium-term performance as the UK economy sees a gradual recovery," Lloyds said in a statement.

Lloyds shares closed down 0.7 per cent at 71.92 pence yesterday, giving the bank a market capitalisation of around £49 billion.

Lloyds shares have risen around 44 per cent since the start of 2010, outperforming a 4 per cent gain in the DJ Stoxx European bank sector.

Reuters, Bloomberg