The expenses from that sector have led the company to experience a loss in 2012.
Lloyds Banking Group has been able to essentially slash its losses in half in 2012, despite the fact that it had to come up with a tremendous amount of money to set aside in order to make payments for the insurance industry scandal in which it mis-sold coverage products.
Its full year loss has now been revealed to be £1.34 billion ($2 billion) which is much lower than its 2011 deficit.
The bank has now shared that its losses last year were £1.34 billion, which is a considerable improvement over 2011, when it recorded a deficit of £2.71 billion. Even though it faced that sizeable insurance industry loss for another year, the bank has maintained its optimism about this year and coming years, and has underscored the improvements that were made to its underlying performance last year as a positive sign for things to come.
The company is looking beyond its struggles in the insurance industry and pointed out the improvements it has made.
Antonio Horta-Osorio, the Lloyds Bank chief executive – who will be receiving a bonus of £1.48 million regardless of the losses – said that “We are making significant investments in our simple, lower-risk, customer-focused U.K. retail and commercial banking model, thereby continuing to support our customers and helping Britain to prosper.”
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He went on to state that they are anticipating that this will allow them to bring themselves back into a profitable state, so the core business will be able to grow. Horta-Osorio added that they are now primed to “realize our full potential to deliver strong, stable and sustainable returns to shareholders, and to allow U.K. taxpayers’ investments in the group to be repaid.”
The primary struggle that was experienced by the bank – 39 percent of which is now owned by the British government – was the result of a massive scandal in the insurance industry, in which the company mis-sold its products to huge numbers of businesses and individuals.
It was not alone in this insurance industry scandal disaster, as other banks have also been charged with similar allegations of having mis-sold their coverage products.