CEO Daniels has ‘no regrets’ as Lloyds returns to profit
As Lloyds Banking Group reveals its first annual profit since the taxpayer bailout, outgoing chief executive Eric Daniels tells Channel 4 News he does not regret “one minute” of his tenure.
Lloyds Banking Group, which is 41 per cent owned by the taxpayer, reported pre-tax profits of £2.2 billion last year compared to a loss of £6.3bn in 2009.
The bank’s bad debt losses narrowed in 2010 to £13bn, down from £23bn the previous year.
On Thursday RBS reported losses of £1.1bn for 2010 against a £3.6bn loss in 2009.
Lloyds has already revealed its bonus plans, with its outgoing Chief Executive, Eric Daniels, being awarded £1.45m for 2010.
But, speaking to Channel 4 News Business Correspondent, Siobhan Kennedy, Mr Daniels left open the possibility that he might decline the bonus. He said that it had been deferred until 2013, so he did not need to make a decision until then.
Asked whether he had any regrets about carrying through the Lloyds takeover of HBoS – which triggered the bank’s debt problems – he said that he still believed that the deal would be “very good for our shareholders”.
He added: “If I look back, it has been a huge honour and privilege to have led Lloyds. I have not regretted a minute of it. It’s been good fun and I am very proud of what the 100,000 people here have accomplished.”
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The 45 per cent reduction in impairment charges came despite a “deterioration” in some of the group’s international businesses, which was offset by improvements in the retail and wholesale divisions at the bank.
The wealth and international division increased losses before tax to £5.2bn, compared to £3.3bn in 2009 – which was due to the £4.3bn impairment charge in Ireland.
The bank inherited most of the disastrous losses on Irish property from HBoS, which it rescued at the height of the financial crisis in 2008.
The economic environment in Ireland hit crisis point in the last quarter of 2010 and resulted in multibillion pound bailouts from the EU and IMF.
But the retail – or high street – division performed well in 2010, opening 1.9 million current accounts in 2010, as well as five million new savings accounts.
The group said it extended £30bn of gross mortgage lending including to 50,000 first-time buyers.
The bank also provided £49bn gross lending to UK businesses, of which £11bn was to small and medium sized enterprises.
A further blow came last week when lender Halifax revealed it would have to pay £500m in compensation after it admitted confusing 600,000 customers about whether a cap on its standard variable rate mortgage applied to them.