25th February 2011
Last year the bank, which is 41% owned by the taxpayer had to take into account £24bn impairment charge as a result of the HBOS rescue during the 2008 banking crisis.
The bank did not pay corporation tax this year as past losses are still reducing its future tax bill.
It goes on to report that 50% of the bank's mortgage customers are now on standard variable rate deals, which are more profitable for the bank, as their fixed deals come to an end.
On his blog BBC News business editor Robert Peston points out that Lloyds' profits actually fell in the second half of last year compared with the first half – from £1.6bn to £609m.
He said: "On the so-called statutory measure of profit, Lloyds actually made a loss again in the second half of the year – of just over £1bn.
Much of that deterioration in the latter stages of 2010 was due to Ireland's economic woes.
Lloyds' losses on Irish loans going bad increased by £1.4bn to £4.3bn.
Peston believes Lloyds is returning to health.
"After its controversial merger with HBOS two years ago – is that it reduced by £61bn the amount it has in effect borrowed from taxpayers via exceptional loans and guarantees provided by central banks and the Treasury.
But it still has a further £91bn to repay over the coming year and a bit – which it may not find easy.
He also adds that he has just interviewed Lloyds chief executive Eric Daniels, who stands down as Lloyds chief executive on Monday.