LONDON, England (CNN) -- British bank Lloyds has announced that HBOS, the rival it took over last year, made a £10.8 billion ($15.5 billion) pre-tax loss for 2008.
The global economic slowdown is producing big losses in the British banking industry.
Lloyds itself posted an 80 percent plunge in pre-tax profit to £807 million ($1.1 billion), which was in line with figures released in a trading update earlier this month.
The bank said the 2008 results were the product of "difficult market conditions" marked by a significant decline in credit quality and the fall in the UK property market.
In a statement, Chairman Victor Blank said the short-term outlook for the merged group was "challenging."
Lloyds Banking Group was formed following the merger between HBOS and Lloyds TSB last year. It began trading for the first time in January.
Lloyds Chairman Victor Blank said the combined bank was in a strong position to "reap the benefits" when economic conditions begin to "normalize."
In the meantime, he said: "Our imperative is to manage the business as effectively as possible during these challenging times."
The UK government took a stake in both HBOS and Lloyds TSB last October as part of the bailout of banks hit by toxic debt.