Lloyds profits slashed by 80%

Lloyds Banking Group today said it expected to be loss-making this year following its takeover of ailing rival HBOS.

The former Lloyds TSB business saw profits slashed 80% to £807m (€905m) in 2008 compared with £4bn (€4.4bn) in 2007.

But the enlarged group will fall into the red in 2009 after the deal to buy HBOS, which plunged £9.9bn (€11bn) into the red last year.

The latest grim update comes a day after Royal Bank of Scotland unveiled a record £24.1bn (€27bn) loss and a new bail-out worth up to £25.5bn (€28.6bn).