StockMarketWire.com - Banking group Lloyds swung to a loss in the first half of the year after setting aside £3.8bn to protect against a potential wave of loan losses and warned the outlook remained highly uncertain.

For the six months ended 30 June, the company reported a pre-tax loss of £602m compared with a profit of £2.9bn on-year as net income slipped 16% to £7.4bn.

The company reported an impairment charge of £3.8bn, including £2.4bn in the second quarter primarily reflecting a 'significant deterioration in forward looking economic outlook,' Lloyds said.

The CET1 ratio rose to 14.6% from 14%, while net interest margin fell to 2.59% from 2.90%.

Looking ahead, the bank said impairment was expected to be between £4.5bn and £5.5bn and risk-weighted assets were expected to be 'flat to modestly' up compared to the first half of 2020.

Net interest margin was expected to remain broadly stable on the second quarter level at about 240 basis points for the rest of the year resulting in a full year margin of 250 basis points.

'There have been early signs of recovery in the group's core markets, mainly in consumer spending and the housing market, but the outlook remains highly uncertain and the impact of lower rates and economic fragility will continue for at least the rest of the year,' the ocmpany warned.






Story provided by StockMarketWire.com