Part-nationalised UK lender Lloyds Banking Group slumped into the red last year with losses of £6.3 billion sterling.
The bank owns Bank of Scotland (Ireland) here, and its retail brand Halifax, which is being wound down.
Lloyds said it continues to have concerns about the outlook for the Irish economy although it expects 2009 to have been the peak for its impairment charge for bad loans.
Impairment charges in its Wealth and International division - which includes its Irish operations - rose to £4 billion last year, compared to £731m in 2008. The bank said this reflects the significant deterioration in the credit risk environment in Ireland and Australia.
Of theses impairment losses, the bank said that £2.95 billion arose in Ireland 'which experienced a significant deterioration in asset values driven by the collapse
in liquidity and severe decline in the property sector'. This compares to £526m for impairment charges in 2008.
It noted that Irish commercial property values fell by over 50% and house prices by over 25% from their peak.
The bank's gross loans and advances to Irish customers fell to £29.1 billion from £31.4 billion in 2008.
The bank also said its customer deposits have decreased by 15% to £29 billion, mainly due to outflows in Ireland, reflecting aggressive pricing from competitors who have also benefited from the Government's deposit guarantee here.
'2009 was a year of significant achievement in shaping the group,' chief executive Eric Daniels said. 'We are building strong earnings momentum and expect our performance to improve significantly in 2010 and beyond,' he added.
Group impairment charges jump to £24 billion
The UK government now owns 41.3% of Lloyds Banking Group (LBG) after a huge bailout after last year's takeover of HBOS bank, which was saddled with high-risk investments in the housing and commercial property sector. LBG added that impairments mushroomed to £24 billion in 2009, largely because of the HBOS purchase.
'There was a significant increase in impairments, which rose to £24 billion from £14.9 billion in 2008, principally due to the HBOS portfolios and their high level of exposure to commercial property,' the banking group said said.
On a positive note, however, the group added that impairment levels were 'expected to have peaked'.
Group revenues increased by 12% last year to stand at £23.96 billion.
'During 2009 the group delivered a resilient trading performance against the backdrop of a marked slowdown in the UK economic environment and continued challenges in financial markets,' Lloyds said.
LBG was created in January 2009 when Lloyds TSB bought rival lender HBOS in a state-brokered deal. The new group went on to fall under state control, as did Royal Bank of Scotland (RBS) and Northern Rock, as a result of the lenders' enormous losses caused by the credit crunch.
Earlier this week, LBG had revealed that boss Daniels would not take his annual bonus of £2.3m amid intense public anger about bank pay following the state bailouts.
Shares in Lloyds Banking Group were down 5.3% to 52p in London this afternoon.
