Lloyds eyes return to profit

Part-nationalised Lloyds Banking Group today flagged up a return to profit this year after seeing lower than expected bad debts.

The group, which is 41% taxpayer-owned after rescuing ailing HBOS, believes it will be “profitable on a combined business basis” in 2010.

Lloyds racked up £24bn (€26.8bn) in bad debts during 2009 – mainly due to the toxic debts in the HBOS loan book – which led to a £6.3bn (€7bn) loss last year.

But the group said today: “Impairment provisions are currently trending at lower levels than anticipated and as a result the group now expects to deliver a better impairment performance than previously guided, in both the retail and corporate businesses, in 2010.”