The part state-owned British bank Lloyds said losses last year were the equivalent of 4.1 billion euros and it is pushing back key targets of its turnaround plan.
Lloyds, which is 40 percent owned by the UK government after a state bailout during the 2008 financial crisis, forecast its revenues would fall further this year, after dropping 10 percent in 2011.
“We expect the external environment to remain challenging in 2012, with a subdued economy, continued high levels of regulatory scrutiny and political uncertainty relating to the banking sector, and the continued potential for downside effects from financial market volatility and instability in the euro zone,” Lloyds Chief Executive Antonio Horta-Osorio said.
Britain hopes to sell back its stake in Lloyds and Royal Bank of Scotland to the private sector, but the timing remains uncertain due to the banks’ ongoing problems, with some analysts speculating the government may have to sell some of its shares at a loss.
Lloyds took a big hit in 2011 to compensate customers for the mis-selling of payment protection insurance, which typically covers loan repayments if customers fall ill or lose their jobs.
UK banks have been forced to pay out billions of pounds in compensation after a regulatory investigation ruled the policies were often sold to people who would not have been able to claim.