Lloyds Banking Group’s UK life, pensions and investments division saw a 25 per cent drop in profits last year to £617m from £826m in 2008.
The fall was revealed as Lloyds Banking Group posted a loss of £6.3bn for 2009.
The group’s loss was less than experts expected and slightly down on the previous year’s £6.7bn loss. Impairment losses increased by 61 per cent £9.1bn to £24bn for the year. with a 7 percent decrease in loans and advances to customers from £677bn in 2008 to £627bn in 2009.
The company says its life and pension profits were significantly affected by the general contraction in the market but the reduction also reflects the integration of the intermediary sales forces and the withdrawal of a number of legacy HBOS products with poor returns.
A loss of £3.3bn was reported for the wealth and international business, a new division created in 2009 which includes Scottish Widows Investment Partnership as well as the group’s offshore and private banking operations.
In its retail business, total income in mortgages and savings dropped 27 per cent to £3.6bn in 2009 from £5bn the previous year. Impairment losses on retail loans and advances have increased by 14 percent to £4.2 in 2009.
Payment protection insurance income dropped 4 percent to £349m last year. The firm says the decrease is a result of the market wide move to monthly premiums on payment protection.
Lloyds will launch its new bancassurance proposition in mid-2010 following the integration of the Scottish Widows and Clerical Medical salesforces last year.
Group chief executive Eric Daniels says: “Although we are forecasting a slow, below-trend, economic recovery, the group is successfully addressing the near-term challenges and is well positioned to deliver value for our customers and shareholders.
“As a result, the financial performance of the group’s continuing businesses is expected to improve significantly in 2010 and beyond.”
Earlier last week Daniels waived his £2.3m bonus for 2009.