Lloyds Banking Group see profits fall 72 per cent from £4.4bn to £1.2bn

The bank revealed the extent of the financial devastation caused by Covid-19, as statutory pre-tax profit fell to £1.2bn, from £4.4bn the previous year.

It is better than the £905m analysts had expected, according to a company-compiled consensus.

It came as the bank booked impairment charges - money it sets aside for loans that could sour - of £4.2bn, compared with £1.3bn a year earlier.

It was lower than the £4.7bn that analysts were expecting, after the bank notched up impairments of just £128m in the fourth quarter, compared with the £586m that had been expected.

Net income dropped 16 per cent to £14.4bn across the financial year.

Chief executive Antonio Horta-Osorio said: "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."

Russell Galley, Managing Director, of Halifax, said: "We know that the pandemic has had a major impact on daily life for people in communities and businesses all over the world and Halifax colleagues have continued to put all their dedication into supporting our customers day in, day out from our branches, living rooms and kitchen tables. Their efforts have not wavered despite all the balancing and other challenges of lockdown on their lives outside of work and I am immensely proud of our every one of them.

Mr Galley added: "Our branch colleagues have made more than 750,000 well-being calls customers local to them, explaining the support available during the pandemic and signposting them to local community organisations and voluntary groups. We have been working hard to support customers who may be in more vulnerable situations, including helping people with limited documentation to access a bank account, and our dedicated support teams are trained to offer specialist help to those impacted by cancer, domestic abuse and bereavement.

"We launched the ‘trusted person card’ which allows personal current account customers to apply for an additional debit card to give to a nominated trusted person to make essential purchases such as buying groceries and withdraw cash on their behalf.

"As well as increasing our cheque deposit limit through our mobile app and extending our interest-free overdrafts to £500, we quickly designed and built number of online tools to help customers with things like payment holidays on mortgages, credit cards, loans, and motor finance, as well as a tool to help them apply for refunds where they have faced travel disruption.

"We launched our energy saving tool online in partnership with the Energy Saving Trust to help people find out how improving their home’s energy efficiency can also save money – we’re seeing a lot of people using this functionality as the way they live and work has changed over the past year.

"We saw a surge in the market over the second half of last year as people looked to find new properties with greater space, spurred on by increased time spent at home. We are committed to helping people take their first step on to the property ladder and while there have been record levels of mortgage approvals over the past few months, raising a deposit is still hands down the biggest challenge for first-time buyers. We reintroduced options at higher loan to value (LTV) at the end of 2020 to help support more people ready to take the first step.

"Since the summer we have also seen people race to make much sought after stamp duty savings, which has driven a surge in applications. We know that lockdown restrictions have made it more practically challenging for those buying and selling, but the stamp duty ‘holiday’ has been one of the main drivers of continued demand for sales and purchases during the pandemic.

"Our latest research found that homeowners in England and Wales trying to move home during the stamp duty holiday period are saving on average £11,566 – offsetting the cost of house price increases as a result of the pandemic property market mini-boom.

"The average house price for homemovers in the 6 months to June 2020 was £373,537, but this increased by £57,790 during the stamp duty holiday period to £431,327 in the 6 months to Dec 2020. While the threshold for stamp duty was increased to £500,000, based on the average house price for homemovers, this meant only those in London and the South East still had to pay on average £9,848 and £925 respectively."

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