Lloyds Banking Group Plc, Britain's biggest mortgage lender, on its unexpected full-year loss, in 2009 on the bank's takeover of HBOS Plc., showed continuation in impairments that haunted the company, but hoped that its performance improves in 2010.

"We have established positive trends in margin, cost and impairments and are well positioned. We are building strong earnings momentum and expect our performance to improve significantly in 2010 and beyond", Chief Executive Officer Eric Daniels said.

HBOS's bad loans cost the bank around £10 Billion in impairment charges in the first half of last year.

Lloyds reported a net profit of £2.83 Billion for the year compared with £772 Million a year earlier, because of a £11.17 Billion goodwill credit related to the acquisition of ailing mortgage lender HBOS.

"The HBOS legacy still weighs heavily on Lloyds, although these numbers do show some signs of encouragement. Lloyd's remains as something of a U. K. recovery play and therefore hostage to the fortunes of the broader economic picture", Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, said.

Banco Santander SA, Spain's biggest bank, increased its gross U. K. market share to 18.6% in 2009 from 13.9% a year earlier.