Lloyds Banking Group’s decision to stop writing new payment protection insurance business cost it £70m last year.
But the bank saw a return to profit in 2010 at £2.2bn on a combined businesses basis after a £6.3bn loss in 2009.
It lent £30bn in gross mortgage lending and £49bn in gross lending to UK businesses, exceeding Government targets for the year.
Profits for the life, pension and investment UK business, which includes Scottish Widows and Clerical Medical, rose by 11 per cent to £683m before a fair value unwind. The unwind refers to the £70m impact of Lloyds’ decision last July to stop selling PPI across all five of its brands.
Lloyds stopped processing PPI complaints in October, pending a decision on the judicial review brought by the British Bankers’ Association on PPI complaint measures.
Total new business profit for UK life, pension and investments nearly doubled from £135m to £267m.
Protection business excluding PPI was up by 10 per cent from £519m to £574m. Sav- ings and investment business fell by 40 per cent from £2.7bn to £1.6bn.
Individual pension business fell by 30 per cent from £2.3bn to £1.6bn while corporate and other pensions was relatively flat at £2.8bn from £2.6bn. Managed fund business rose by 21 per cent to £177m from £146m.
Cavendish Asset Management senior fund manager Paul Mumford says: “The standout performance in the retail division will undoubtedly raise eyebrows, adding fuel to the fire of those that view the banking behemoth as an anti-competitive force.
“There is a dilemma here for the investor – the better Lloyds does, the more the question of competition, not to mention the taxpayer stake, will loom.”