Shares in Lloyds Banking Group shot up by more than eight per cent this morning following a brief trading update.
The troubled banking group released a statement this morning, ahead of a presentation to investors due to take place on Wednesday 24 March. The release reveals that Lloyds believes it will return to profit this year.
Lloyds Banking Group revealed losses of £6.3billion for 2009 in February, only marginally less than the £6.7billion loss seen for 2008. Nevertheless, the banking group claims:
"Costs have remained well controlled and are lower than the equivalent period in 2009. 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.
"Overall, based on the Group's current economic and regulatory assumptions which remain unchanged since our recent 2009 preliminary results announcement, the Group believes that it will be profitable on a combined businesses basis in 2010."
Commenting, Joshua Raymond, market strategist at City Index said: "Lloyds have come out and surprised the market with an upbeat trading statement saying they will return to profitability in 2010.
"The news is giving its shares, and indeed the whole banking sector, a big lift today, particularly as Lloyds disappointed the market with their earnings last month."
Lloyds Banking Group is due to release its interim management statement on 27 April.
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