LONDON ( TheStreet) -- Lloyds Banking Group ( LYG) swung to a loss in 2010 on impairment charges and said margins would be pressured this year.

The bank posted a loss of 320 million pounds ($514.2 million) in 2010, a reversal from a profit of 2.83 billion pounds in 2009. Money set aside for bad loans fell 45% overall to 13.2 billion pounds but impairment charges in Ireland rose 49% to 4.3 billion pounds.

The bank, which is 41%-owned by the U.K. government, reported a higher-than expected pretax profit in 2010 of 2.2 billion pounds.

Lloyds, the U.K.'s top mortgage lender, said its net interest margin for 2011 would be unchanged.

CEO Eric Daniels, who will be stepping down this week, said the rate of improvement in loan impairments that helped drive 2010 pretax profit wouldn't be as dramatic in 2011 amid slower British economic growth. That means that 2011 and 2012 profit estimates might need to be revised, analysts said, The Associated Press reports.

-- Written by Joseph Woelfel

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Copyright 2011 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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