Lloyds racks up £1.6bn profits from cuts

From today's Morning Star

Louise Nousratpour

Taxpayer-backed Lloyds Banking Group has boasted of a "significant milestone" when it announced half-year profits of £1.6 billion.

The result came as a marked turnaround on the £4bn of losses seen a year ago and was better than expected by most analysts in the City.

Lloyds, which is 41 per cent owned by the public, claimed that sharply lower bad debts had helped its recovery, with losses on loan defaults more than halving in the first six months of 2010.

However Left Economics Advisory Panel Andrew Fisher refuted the banks version of events.

"The profit is not due to successful operation, but due to private equity-style asset-stripping with 16,000 jobs cuts, pensions cut and branches sold off to Santander," he said.

Mr Fisher added sarcastically that the taxpayer should be pleased with the profit because "with a 41 per cent stake we should be welcoming over £650 million into the public coffers. That figure would more than pay for the Health in Pregnancy grant that was abolished in the last Budget."

Finance union Unite said that the profits had only been possible because of staff who had worked "tirelessly in extremely difficult circumstances."

National officer Cath Speight said: "Since the formation of the bank there have been over 16,000 jobs lost and those who hold the key to the success of the bank continue to face insecurity and uncertainty about their futures because of the sale of bank branches.

"Employees have also suffered as Lloyds severely curtailed their future pension benefits."

Lloyd's profits contributed to a combined haul of more than £11bn from the four major high street banks.

HSBC reported a bumper £7bn half-year profit on Monday.