Lloyds Banking Group, the part-nationalised British bank that has been hit by its chief executive's temporary absence due to health issues, reported a nine-month loss and said it may have to put back some financial targets due to the economic turmoil.
Lloyds, which is some 40% owned by the British government after a state bail-out during the 2008 credit crisis, said it made a nine-month loss of £3.86 billion sterling.
It said its earnings were hit by lower banking margins and higher funding costs.
Lloyds said last week that 47-year old chief executive Antonio Horta-Osorio had fallen ill and was taking a break, leaving a potential power vacuum at the top of Britain's biggest retail bank.
The bank reported a net loss of £2.78 billion in the nine-month period on exceptional charges and a drop in income. LBG said its loss after tax for the nine months to September 30 compared with a net profit of £1.6 billion in the first three quarters of 2010.
The bank has been hit by one-off charges of £3.2 billion to compensate customers mis-sold insurance. It added that the bank's income fell by 9% to £16.1 billion in the reporting period.
But LBG also announced a 22% drop in total impairment charges to £7.37 billion in the first nine months. It said that higher charges in Ireland were more than offset by improvements elsewhere in the group.
Lloyds Banking Group has set aside £2.5 billion to cover bad debts related to Irish commercial and residential property loans.
Figures published by the bank show Ireland accounts for just over a third of Lloyds total impairment charges for the first nine months of the year. The total amount set aside by Lloyds to cover bad debts has fallen 22% compared to last year but the Irish charges incresed by 14% over the same time.
Lloyds Banking Group axed 15,000 jobs earlier this year in a bid to save £1.5 billion annually.
