Oh LLOY shareholders may be in denial, that (the purchase of HBOS) was the single most stupid piece of Banking, done over a weekend (so it seemed!).

LLOY is still not clear, as many expect a further write-off, when the Markets have sufficient bouyancy. It seems difficult to understand how the new group has gone from dire-loss to "profit" as described here.
As to the Government holding - I thought we taxpayers had been swapped for we holders.....so, no change there.
As to creative Accounting - wasn't it actions like this that created the Banking Crisis in the first case - Banks must not be allowed to resort to this, ever again.

Like it or not, creative accounting makes the world go round - same as bankers & politics. Remember, just because figures are released, they do not have to be accurate. Indeed, the Office for National Statistics subsequently amends its own figures months down the line. Today, the USA saw GDP fall 1%, against a forecast of 1.5%. So far so good 'eh. Then, in the small print the US Commerce Dept revised its figures for the whole of 2008, saying the recession has been deeper than previously estimated!! Hmmm - you mean the little buggers were lying before - you bet they were !! Still betting on a modest profit for LBG on Wed - even tho' the figures will be rigged. Sell on the rumour? I'm holding for the longer term as shareholder confidence will boost the sp - specially if promises of Divs materialise. As a 43% shareholder I'm sure the Treasury will use its votes wisely and accept the Divi Cheque. LOL

The OBSERVER says :

Lloyds Banking Group's attempts to sell a 6bn Bank of Scotland portfolio of loans have been unsuccessful

High st banks to write off further 32bn but Lloyds is due to forecast that worst is over

THE INDEPENDENT says:

Lloyds and Royal Bank of Scotland in spotlight as banks issue first-half results

European banks see some light

ZURICH/LONDON (Reuters) - Rising profit from Standard Chartered and BNP Paribas raised hopes that European banks were over the worst of the financial crisis, and even a big loss from UBS masked its best underlying performance in two years.

The biggest concern for UBS was another heavy outflow of 39.4 billion Swiss francs (22 billion pounds) from its wealth and asset management divisions, but a bigger-than-expected net loss of 1.4 billion francs was mostly down to one-off charges.

Sarasin analyst Reiner Skierka said UBS's overall results were "quite good," but he remained cautious on the bank's future until it could reverse the outflow of clients' cash.

BNP Paribas , France's biggest bank by market value, posted a 6.6 percent rise in net profit, while Asia-focussed Standard Chartered (STAN.L) revealed a record pretax result.

StanChart also announced a $1.7 billion (1 billion pounds) fundraising so it could take advantage of opportunities in China and India as their economies recovered.

"It's about staying ahead of the game," Chief Executive Peter Sands said. "Given that we see Asia having a shorter and shallower recession than other parts of the world, our clients are seeing a light at the end of the tunnel."

BNP Paribas's CEO also sounded a more confident note.

"I am relatively positive about the markets," he said.

Other European banks have also recently reported profits to the end of June, including HSBC (HSBA.L) and Barclays (BARC.L) in Britain and Switzerland's Credit Suisse .

WINNERS AND LOSERS

UBS was not the only European bank announcing losses on Tuesday. Northern Rock , a victim of the credit crunch that was nationalised by the British government in early 2008, said its first-half losses had grown by a quarter.

The bank said it was hit by rising funding and hedging costs and said mortgage arrears were still growing despite an improvement in early-stage arrears.

CEO Gary Hoffman said the bank was constrained by capital, and future developments hinged on unemployment levels and a revival in property prices.

VTB , Russia's second biggest lender, also reported a bigger-than-expected net loss of 20.5 billion roubles (389 million pounds) for the first quarter as loan provisions rose faster than expected. The bank said it did not expect to return to profit this year.

Part-nationalised British bank RBS (RBS.L) on Tuesday agreed to sell some of its Asian assets to Australia and New Zealand Banking Group (ANZ) for $550 million, as the bank shrinks its global footprint and retreats to its core markets.

Banking shares were mostly lower, with the DJ Stoxx banking index down about 0.9 percent.

UBS and VTB were down more than 4 percent, while BNP Paribas was up 0.15 percent. StanChart was also down more than 4 percent, but traders put that down to the fundraising, which will involve placing 4 percent of its stock.

RBS shares were higher after news of the asset sale to ANZ.

*
Pro-forma loss of 4.0 billion for the first half (2008: 2.8 billion profit).
*
Statutory profit before tax of 6.0 billion (2008: 0.6 billion) includes an 11.2 billion acquisition-related negative goodwill gain.
*
Resilient core businesses performance despite margin pressure and weak economy. 18 billion of gross mortgage lending: a 27 per cent share of gross lending and 37 per cent of net new lending. 60,000 new commercial accounts: a 24 per cent share of start-ups.
*
Integration ahead of schedule and on track to deliver over 1.5 billion run rate by end 2011. Over 100 million of cost synergies realised in the half. Annualised run-rate savings of around 700 million expected by the year end.
*
Total impairments significantly higher at 13.4 billion but expected to peak in first half. Impairments expected to peak in first half reflecting prudent valuation of HBOS's commercial property related assets. HBOS legacy assets account for 80 per cent of first half charge.
*
Robust capital position and strengthened funding profile. Core tier one capital at 6.3 per cent in line with pro-forma opening position. Wholesale funding more than one year increased from 44 per cent to 47 per cent.
*
Outlook: economy expected to stabilise, with weak upturn in 2010. As previously announced, expect to report a loss before tax for 2009 (excluding acquisition related negative goodwill gain). Continued pressure on margins more than offset by lower expected impairment charges in second half.
*
Medium term goals reflect economic outlook and significant opportunity to leverage relationship-led model across enlarged business base. High single-digit income growth within two years. Continued reduction in cost:income ratio. Run-off of around 200 billion of lower return assets to reduce the balance sheet and invest in core relationship businesses.

They certainly appear to have been well received,up 5 in early trade.

Also large volume - 33m @8:15.

Already up 8% on 4bn loss!!! Funny old world!
(Taylor Wimpey debt hugely reduced in today's figures & the sp drops.)
All about expectations I susupect.

Yes,I agree.It all seems a lot like Blind Mans' Buff,or is the word "bluff".
I keep hearing though about a mountain of money on the sidelines with nowhere to go. Perhaps this has a lot to do with it.

UPDATE: Lloyds Posts GBP4 Billion 1st Half Pro-Forma Loss From Bad Loans





(Adds detail.)
By Margot Patrick

Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Lloyds Banking Group PLC (LYG) Wednesday reported that loan impairments rose more than five-fold in the first six months of the year, as the deepest U.K. downturn in decades made it harder for mortgage borrowers and companies to repay debt.

But Lloyds said it sees the second half as "tough but manageable" and that it expects loan impairment charges to come down significantly from GBP13.4 billion in the first half.

Reporting a first-half pro-forma pretax loss of GBP3.96 billion - lower than analyst expectations of around GBP5.24 billion - Chief Executive Eric Daniels said the group's performance should improve from the second half as the loan impairments decline, and that the bank is "well positioned to outperform in the medium term."

The GBP13.4 billion set aside by Lloyds to cover loan losses compared with GBP2.5 billion in the first half of 2008, with the bulk of the problem loans coming from Lloyds' HBOS division.

The bank made a GBP3.12 billion net loss, compared to a GBP1.95 billion net profit in the same 2008 period.

The comparable figures for the first half of 2008 were made on a pro-forma basis compiling the separate performance of Lloyds and HBOS in the period.

Lloyds agreed to buy HBOS last year at the height of the financial crisis and within weeks needed a GBP17 billion bailout that resulted in the U.K. government taking a 43% stake in its shares.

Before making the acquisition, Lloyds was among the few banks to carry a triple-A credit rating and had been lauded for focusing on traditional lending and deposits while its peers loaded up on risky assets.

The bank said Wednesday that the government submitted a restructuring plan for Lloyds to the European Commission on July 15. The Commission has indicated that a condition of approving the state aid received by Lloyds could be the disposal of some of its operations.

Shares in Lloyds closed down 2 pence Tuesday at 84 pence. The stock has lost about 10% since the start of the year but has regained 70% since hitting a low of 25 pence in March.

Company Web site: http://www.lloydsbankinggroup.com

-By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; margot.patrick@dowjones.com

Buy whist its still under a 1

can anyone tell me if a divi will be payed on these results

Douggie - "However, it is not the Board's intention to pay a dividend on ordinary shares in respect of 2009. "

thanks skinny....;o/

I would have been amazed if they had. However, as HMG are a 43% shareholder, anything is possible. As divi's are taxed at source, the government would have received the tax & the divi.
Just for once in my life, taking up the rights issue has paid off handsomely, so divi not too important in this case.

05-Aug-09 Lloyds Banking Group LLOY Shore Capital Hold 95.00p - - Reiteration
05-Aug-09 Lloyds Banking Group LLOY Keefe, Bruyette & Woods Underperform 95.00p - - Reiteration
05-Aug-09 Lloyds Banking Group LLOY NCB Sell 95.00p - - Reiteration

Well that's agreed then :-)

Be back nearer 70p in two weeks after it all sinks in, and the doom and gloom brigade start waffling on. Out for now, back in, when the dust settles around 75p

You may not see that price again ,unless this trades like BARC did for a few months ,,all over the place...

I doubt we going to the see the 70s again - next resistance is 100 mark -