Lloyds Banking Group losses were 'expected'
24 February 2012 Last updated at 13:52 GMT
Lloyds Banking Group has reported a loss of £3.5bn for 2011.
The biggest contributor to the loss was the £3.2bn cost of compensating customers mis-sold PPI credit insurance.
However, the bank did beat its Project Merlin targets and increased net business lending by 3%, compared with a decline in the combined lending of Britain's top five banks.
Peter McNamara, the former managing director of Alliance & Leicester, said customers are also starting to save more - which affects the bank's balance sheet.