Lloyds, HBOS report declines

Struggling British banks HBOS and Lloyds Banking Group reported sharp declines in 2008, with HBOS losing more than $15 billion in the year.

Lloyds, which took over HBOS last year, said its profits dropped 80 percent compared to 2007, posting a profit of $1.15 billion, The Herald reported Friday.

HBOS losses include a $1.2 billion tax charge on top of pre-tax losses $14 billion.

The news follows the Royal Bank of Scotland’s report Thursday that it lost $34 billion in 2008.

In a statement, Lloyds Chief Executive Officer Eric Daniels warned staff cuts could be expected. Against a backdrop of recession and an ongoing global financial crisis, we expect 2009 to be another challenging year, he said.

Other British bankers expressed their dismay.

This is clearly a disappointment for investors following the euphoria seen yesterday, Barclays Wealth analyst Andy Penman told The Herald.

Collins Stewart banking analyst Alex Potter said, the scale of the deterioration in the HBOS book has shocked us.