Lloyds shares sink after £5.5 billion bad loans warning as bank addresses diversity issues

Antonio Horta-Osorio said: “The impact of the coronavirus pandemic in the first half of 2020 has been profound on the way we live our lives and on the global economy. We remain fully focused on helping our customers and the UK economy recover, in collaboration with Government and our regulators.

“I want to express my sincere gratitude to all my colleagues across the group for their dedication and persistence which have allowed us to deliver vital banking services to our customers effectively throughout the pandemic.

“Although the outlook is uncertain, the group’s financial strength and business model allow us to help Britain recover and play our part in returning our country to prosperity. Our customer-focused strategic plan remains fully aligned with the group’s long-term strategic objectives, the position of our franchise and the interests of shareholders.”

Lloyds’ already heavily under water saw its shares sink 8% to just 26p.

Ian Gordon at Investec said he does “not anticipate any meaningful recovery in revenues… the outlook has deteriorated”.

Profit margins tumbled.

Nicholas Hyett at Hargreaves Lansdown said: “These are hardly ideal conditions for Lloyds, in fact they’re pretty close to the perfect storm. However, there are some bright spots. The bank’s early move into digital services has served it well, and has historically given it one of the lowest cost-to-income ratios in the industry — a competitive edge in bad times.

“The growing Wealth & Insurance business also provides diversification, and is less sensitive to low interest rates than the core banking operation.”

Horta-Osório also addressed Black Lives Matter. He said: “Like many others I have been moved by the recent tragic events in the US and the issues raised around inclusion and discrimination.”

He said there would be an immediate action plan on recruitment, culture and inclusion. “I am committed to understanding the perspective of our black colleagues.”

At the moment, just 40 black staff are in senior positions — 0.6% of 7000 senior staff.