Lloyds Bank "remains confident" in face of 71% pandemic profit drop

A UK bank has reported that its underlying profits have dropped by more than 70 per cent over the course of the pandemic.

Lloyds Banking Group, which operates banks across the country, saw its underlying profits for 2020 drop from £7.5bn to £2.2bn - a fall of 71 per cent.

The group also reported that its net income for the year decreased by 16 per cent, shrinking from £17.1bn to £14.4bn.

However, the fourth quarter’s figures represented an improvement on the previous period, with profits rising by £170m between September and the end of December.

The group also announced that it will be resuming dividend payments.

António Horta-Osório, group chief executive at Lloyds, commented: “The group’s unique business model, customer focused strategy and transformation in recent years positioned us well to respond effectively to the needs of our customers in 2020.

“At the same time, the group’s financial performance in the year has been impacted by the pandemic.

“We are now seeing positive developments in the business, including growth of £10.2bn in the open mortgage book in the second half of the year and total deposits up £39bn in the year, the latter given curtailed retail spending and inflows to our trusted brands.

“Despite the significant impairment charge taken in the year, predominantly in the first half, the group has delivered a statutory profit after tax of £1.4bn.

“Further, the group’s strong capital position has also enabled us to resume capital distributions with a dividend of 0.57 pence per share.

“Looking forward, significant uncertainties remain, specifically relating to the coronavirus pandemic and the speed and efficacy of the vaccination programme in the UK and around the world.

“I remain confident that the group’s clear purpose, unique business model, significant competitive advantages and the customer focused evolution of our strategy we have announced will ensure that the group is able to help Britain recover and in so doing, help transition to a sustainable economy.”