The UK-based Lloyds Banking Group -- 41 per cent owned by the government -- has posted a loss of £3.5bn for the full year ended 31 December 2011, compared to £258m in 2010.
The financial services group reported a total income, net of insurance claims, of £20.77bn in 2011 compared to £24.95bn in 2010.
During the year, the group's retail, wholesale, and wealth and international divisions total income decreased by 10 per cent, 38 per cent and 8 per cent respectively. Commercial and insurance divisions improved total income by 7 per cent and 2 per cent respectively in 2011.
The amount of money set aside for bonuses we £375m, 30 per cent lower than the year before. António Horta-Osório, CEO of Lloyds Banking Group has said that he will forego a bonus worth up to £2.4m.
In a statement Horta-Osório said: "In 2011, we established our longer term strategy for the group, acted quickly and decisively to mitigate the effects of a challenging environment and put in place the right foundations to deliver on our objectives over the next 3 - 5 years, whilst continuing to support the UK economy.
Net interest income was £12.23bn in 2011, a decrease of 14 per cent compared with £14.14bn in 2010. Core business profit before tax was £6.34bn in 2011 compared to £6.15bn in 2010, while non-core loss before tax was £3.66bn compared to £3.94bn in 2010.
During 2011, operating expenses reduced by 6 per cent to £10.25bn, while loan to deposit ratio, excluding repos and reverse repos, had improved to 135 per cent.
"Using the framework set out in our strategic review, we accelerated strengthening our balance sheet, decreasing risk and reducing costs. The investments we made behind our brands, distribution, customer relationships and people have strengthened our franchise, and created new opportunities which will enable us to realise over time the group's full potential for growth," Horta-Osório added.
The group achieved a substantial reduction in the non-core portfolio of £53bn in 2011.
At 31 December 2011, the group had total assets and total liabilities of £970.54bn and £923.95bn respectively.
Given the economic outlook, in 2012, on a combined businesses basis, the company expects income to be lower than in 2011.