Lloyds Banking Group said revenue trends improved at its wealth and international business divisions in the third quarter of 2009 compared with performance in the first half of the year, due to rising customer numbers and stronger markets, although it gave no figures.

“We continue to have ongoing concerns with regard to the outlook for the Irish economy and impairments [in wealth and international] remain at a high level totalling £900 million ($1.47 billion) in the third quarter, reflecting particularly significant provisions against our Irish commercial real estate portfolio. We now expect the high level of impairments to continue throughout 2009 and in 2010,” Lloyds Banking Group said in a statement.

Meanwhile, Lloyds Banking Group announced plans to raise a total of at least £21 billion in core capital, made up of £13.5 billion in a rights issue, to which the UK government will subscribe in full for its 43 per cent stake. Lloyds also announced it plans an exchange offer, to generate at least £7.5 billion of contingent core tier 1 and/or core tier 1 capital.

The plans, Lloyds said, will increase its core Tier 1 capital ratio to 8.6 per cent from 6.3 per cent.

"We believe that this represents a significant step towards meeting our, and the Government's, objective that the Group operates as a wholly privately-owned, self-supporting commercial enterprise," said Sir Winfried Bischoff, chairman of Lloyds Banking Group.

The bank reiterated that it has been required to work with the UK government to spin off a “standalone UK banking business” as a condition of receiving state aid under European Union law. In Europe, Germany’s Commerzbank has already sold off a number of non-German banking business as a condition of receiving public aid, for example.

Such a disposal will involve selling a bank with at least 600 branches and about 19 per cent of the group’s total mortgage assets. Such a business would comprise the TSB brand, branches, savings accounts and mortgages with Cheltenham & Gloucester, as well as various Lloyds TSB branches in England, Scotland and Wales.

In an interim statement, the UK-listed bank said of its whole operations: “The group has continued to deliver a good revenue performance in the third quarter of 2009, with similar trends, excluding gains on liability management transactions, to those delivered in the first half of the year.”

Lloyds said its banking net interest margin “has shown clear signs of stabilising” and was flat in the third quarter of 2009, compared to the first half of the year.

As previously announced, Lloyds said it continues to expect the group to report a loss before tax for 2009, excluding the impact of the £11.2 billion credit relating to negative goodwill.