Lloyds confirms its losses

Lloyds International has produced the Australian dollar version of its awful financial statements for the 2009 calendar year.

The themes are the same as those extracted from those for the Australian business from the Lloyds TSB Group financial statements.

Lloyds International - formerly HBOS Australia - reported a loss for the year of $1.18 billion, or more than a quarter of its equity.

This included a loss of $172 million from adjustments relating to the sale of BankWest and St Andrews to Commonwealth Bank in late 2008. Lloyds in 2008 reported an operating profit of $400 million but incurred a loss of $1.9 billion from the sale of its retail businesses to CBA.

The key driver of the loss in 2009 is impairment charges of $1.2 billion, and up from $470m million in 2008. Lloyds' corporate loans are heavily weighted toward property development and to some mining sectors that have struggled over the course of the financial crisis.

Lloyds said it held impaired loans of $3.5 billion, and equal to 14.3 per cent of the portfolio, and up from 5.3 per cent in 2008.

Overall the level of loans fell $3.5 billion to $23.6 billion. However, net interest income increased nine per cent to $761 million thanks to wider margins on corporate loans.