Lloyds Banking Group, a leading British financial services company, has reportedly unveiled that its profits fell by as much as 72% to £1.2 billion in 2020 as it dealt with the economic fallout of the COVID-19 pandemic.
The major domestic lender of Britain uncovered the extent of the financial destruction caused by the coronavirus since its statutory pre-tax profit plunged from £4.4 billion in 2019.
However, the figure of last year was much better than the £905 million that analyst had anticipated, as per a consensus complied by the firm, which is headquartered in London.
Moreover, the supposed losses comes after imposition of three lockdowns in England due to the COVID-19 pandemic crisis, which started in March 2020 and has since lessened household spending and drove up bad loan provisions.
The bank booked big impairment charges, which is money that it puts aside for loans that might sour, with around £4.2 billion in 2020, compared with £1.3 billion in 2019.
António Horta-Osório, outgoing chief executive has set forth new targets in order to expand the insurance as well as wealth business of Lloyds and also reduce expenses further.
Among these fresh targets, the bank stated that it will effectively increase funds from customers in wealth and insurance by £25 billion by 2023. Lloyd would also reduce its office space by 20% over the next three years.
Lloyds Banking Group’s main capital ratio, which is a significant measure of financial resilience, increased to 16.2% in comparison to 15.2% in September.
Mr Osório stated that looking ahead, significant doubts remain, particularly relating to the COVID-19 pandemic and the speed and effectiveness of the vaccination programme across the UK and rest of the world.
Meanwhile, the company’s board also announced that it would soon be bringing dividends back, which were postponed at the start of the COVID-19 crisis, setting a normal payout of nearly 0.57p per share.