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Lloyds Banking Group reveals losses of £10.8bn

Lloyds Banking Group has revealed losses of £10.8bn after its acquisition of HBOS.

Lloyds TSB itself saw its profits fall by 80 per cent from £4bn to £807 m. Its assets fell too as Lloyds’ impairment losses increased by 68 per cent to £3.01bn.

As a result of these poor results, shares in Lloyds have dropped 10.67 per cent this morning to 67p.

Of the £10.8bn, £9.9bn came from HBOS’s losses. Lloyds chief executive Eric Daniels says: “We are buying the business in the down part of the economic cycle, at a significant discount to book value, which increases the likelihood of value creation, and we paid in shares rather than cash which in some part insulated the Lloyds TSB shareholders from market risk.”

Lloyds Banking Group chairman Sir Victor Blank says: “We know the short-term outlook for the enlarged group is challenging. Whenever economic conditions do begin to normalise, however, we believe we will be in a very strong position to reap the benefits.

“Our strong franchise across the whole range of product lines will enable us to do just that. In the meantime, our imperative is to manage the business as effectively as possible during these challenging times, and we have the team to do this.”

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