‘Lloyds set for lucrative 2010’
April 16, 2010 at 3:46 pm
Just a few weeks after Northern Rock announced a belated return to stability, Lloyds Banking Group has revealed that it expects to make a profit during 2010, a drastic turn around in its fortunes. The news prompted an immediate 10% rise in Lloyd’s stock value, up to 62.03p per share.
Lloyds lost more than £6 billion last year, after bosses overestimated the value of its latest acquisition, Halifax Bank of Scotland (HBOS), which was bought by Lloyds at the beginning of 2009. The bank had already been rescued with government funds in 2008, alongside the Royal Bank of Scotland, Northern Rock and Bradford & Bingley.
The taxpayer still claims a 41% share of Lloyds, but experts have warned that the bank cannot currently afford to pay back its government loans. Financial advisers have predicted an arbitrary 2011-2014 date for Lloyds to return the £17 billion that was used to stop the bank imploding in 2009. The BBC was more pessimistic, citing 2015 at the earliest.
Lloyds will continue with cost-cutting measures this year, beginning with the sale of the TSB brand, a number of Cheltenham & Gloucester branches, and the totality of its stake in Intelligent Finance, an internet bank. Lloyds hopes to earn £13.5 billion from this ‘capital raising’ scheme, which came into effect at the beginning of November 2009.
Bank chief Eric Daniels was delighted with Lloyds’s unexpected return to form. He said that in the first 10 weeks of the year "the group’s trading performance has been strong and we are pleased with the group’s performance.”
