In results announced this morning, Lloyds confirmed that profits fell by 80% to £807m.
The fall was largely due to losses of £10.8bn recorded by its subsidiary Halifax Bank of Scotland.
In Ireland, the HBOS group owns Bank of Scotland (Ireland) and Halifax, which employ around 1,700 people.
Overall, the HBOS group employs 4,000 people in the Republic and Northern Ireland.
Bank of Scotland (Ireland) showed a pre-tax loss of €250m and customer deposits were down 32%.
Its Chief Executive Mary Duffy said that the severe deterioration in the Irish economy had led to rising arrears and falling asset values.
The Lloyds group in the UK said it faced another challenging year in 2009.
UK govt 'misinformed' on pension
The British government has said it was 'misinformed' about former Royal Bank of Scotland Chief Executive Fred Goodwin's £693,000 (€778,000) a year pension, which he is clinging on to in defiance of criticism by government ministers.
Mr Goodwin, who left RBS in October when the government bailed out the acquisitive bank, has refused to give up any of the pension pot, valued at £16.6m (€18.6m) according to RBS Chairman Philip Hampton, despite government claims that there should be no rewards for failure in the banking system.
Yesterday, RBS reported a loss of £24.1bn - the biggest in British corporate history - and said it would receive another £13bn of government money to help insure £325bn of its most toxic assets
Mr Goodwin said in a letter to Financial Services Secretary to the Treasury Paul Myners, which was released to news media, that the government had approved his pension and he did not believe a reduction in the sum was 'warranted'.
Mr Myners responded by saying that Mr Goodwin's stance was unfortunate and unacceptable, and while he acknowledged he knew the size of the pension pot in October, he was unaware of any scope for discretion.
