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Lloyds reveals 2011 full year net loss

Consistent with recent performance, equity markets struggled for direction today amid continuing issues surrounding Europe and Greece. The German Finance Minister stated in a letter to the country’s politicians that there is no guarantee that the Greek bailout will be successful, and urged them to vote for the package ahead of the German parliamentary vote on the Greek bailout on Monday. It also came on the day that the Greeks were to launch their private sector involvement (PSI) deal with private creditors, following parliamentary approval last night for the insertion of “retroactive collective action clauses” for bonds issued under Greek law.

Following results from RBS yesterday, today was the turn of the other part nationalised bank to report 2011 results, with Lloyds similarly announcing significant annual losses for the year. The results were broadly in line with expectations, with a full year net loss of £2.8 billion, hit by impairment charges for PPI compensation claims and business restructuring costs. With the bank warning that its outlook was to remain challenging, shares fell 2.3% to 35.73p by the close of trade. This came despite some signs of improvement, with the bank’s core tier 1 capital ratio at 10.8% and its loan to deposit ratio (a measure of leverage) standing at 135% (from 154% at the end of 2010).

In economic news, German and UK GDP figures confirmed the 0.2% contraction in the last quarter of 2011 that was announced in the initial readings. From the US we saw that new home sales dropped in January, to 321,000 from 324,000 in December. The figures are expressed as an annual rate and whilst ahead of forecasts and found amongst a definite uptrend, the figures are still way below the 700,000 per year rate that economists suggest is indicative of a healthy housing market.

The FTSE 100 finished the day down a mere 1.4 points, a negligible percentage change and a closing level of 5936.5. The French CAC and German Dax were stronger performers on the day, the finishing up more than 0.5% with the latter closer to 1%. Brent Crude was still worryingly high at $123.9/bbl at the time of writing.

This was posted in Bdaily's Members' News section by James .