Part-nationalized Lloyds Banking Group will possibly be revealing its first annual profit after being bailed out at the peak of the financial crisis.

The group is forty one percent owned by the taxpayer and is predicted to report pre-tax profits of two billion pounds a marked improvement seen after the loss of £6.3 billion in 2009.

Lloyds has already divulged its bonus plans, with the quitting chief executive Eric Daniels being awarded £1.45 million for 2010, so the City is likely to concentrate on trading.

The bank had a diversified year after it returned to profit at the half-year stage with a surplus of £1.6 billion, but later issued warning over the effect of the Irish debt problem would have on its performance.

Its enhanced expectations for bad debt losses in December to £4.3 billion for 2010, from an earlier estimate of £1.6 billion reported in June. This raised worries, that its return to health has been driven by lower bad debts.

A further blow came in the last week when lender Halifax which is owned by Lloyds, disclosed that it would have to pay five hundred million pounds in compensation after it admitted of confusing six hundred thousand customers about whether a limit on its standard variable rate mortgage applied to them. However, this will affect adversely on the group's 2011 results.

The figures will be Mr. Daniels' last presentation before he hands over to ex Santander UK chief executive Antonio Horta-Osario in the month of March.

Mr. Horta-Osario is faced with a number of trading challenges while advancing, as stated by analysts at Credit Suisse, with margins difficult to come in the entire industry.