Lloyds report £4bn loss
Lloyds report £4bn loss
Wednesday 5th August 2009
Lloyds Banking Group has reported pre-tax losses of £4 billion for the six months of 2009.The banking group blamed the heavy losses on write-offs on bad debts, which it claims became inflated due to the lending of HBOS, compared to Lloyds TSB's more "conservative" mortgage lending.
Lloyds bought HBOS for £9.6 billion in January and has since struggled with the exact level of debt attached to the former building society.
The group said earnings for the first half of this year had been reduced by £13.4 billion in impairments, with 80 per cent in relation to HBOS.
The housing market has also been blamed, with falling house prices having a knock-on effect on the property related loans owned by HBOS.
Lloyds was forced to write off £11.9 billion in loans, of which £8.3 billion was corporate lending.
The bank, which is now 43 per cent state-owned, predicts results will start to improve in the coming months and into next year.
Group chief executive Eric Daniels said: "Our first half loss was driven by the high levels of impairment.
"The core business delivered a resilient performance, despite the weak economy. We are successfully managing the short-term issues and are well positioned to outperform over the medium term, providing value to our customers and shareholders."
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