Lloyds set to bank profits

LLOYDS Banking Group today flagged up a return to profit this year after seeing lower than expected bad debts.

The group, which is 41 per cent taxpayer-owned after rescuing ailing HBOS, believes it will be "profitable on a combined business basis" in 2010.

Lloyds racked up 24 billion in bad debts during 2009, mainly due to the toxic debts in the HBOS loan book, which led to a 6.3bn loss last year.

But the group said today: "Impairment provisions are currently trending at lower levels than anticipated and as a result the group now expects to deliver a better impairment performance than previously guided, in both the retail and corporate businesses, in 2010."