Lloyds has reported a pre-tax loss of £602m in its half-year results, compared to profits of £2.9bn recorded in the same period the year prior.
The banking giant said this performance was impacted by income developments in the period, as well as an increased impairment charge to cover defaulting loans.
In its latest report, Lloyds also noted that net income crashed by 16% to £7.4bn, while other income plunged 22% to £2.5bn, largely driven by a slowdown across key markets in the first half of the year.
Total costs reached £3.9bn in the period, which marked a 4% decline against the year prior, though trading surplus fell by 26% to £3.5bn.
It comes as provisions in the period have totalled £3.8bn to date, including £2.4bn that was set aside in the second quarter, primarily reflecting a “significant deterioration in forward looking economic outlook”.
Looking ahead, its total impairment charges are expected to reach between £4.5bn and £5.5bn.
The group said its outlook remains “highly uncertain” despite early signs of recovery in core markets, and expects that the impact of lower rates and economic fragility will “continue for at least the rest of the year”.
António Horta-Osório, group CEO, 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.”
He added: “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.”