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26
Feb

Bad Debts Bring Lloyds Bank To Its Knees

By Keith Castor

Bad debts have contributed to a staggering £6.3bn pre-tax loss announced by Lloyds Banking Group today.

Part-nationalised, Lloyds Banking Group, which is 41% owned by the taxpayer, made losses of £24m on bad debts – much higher than those reported by RBS on Thursday.

“There was a significant increase in impairments, which rose to £24bn from £14.9bn in 2008, principally due to the HBOS portfolios and their high level of exposure to commercial property,” Lloyds Banking Group said.

However, it added that impairment charges were 21% lower in the second half of the year and it expected a similar rate of improvement throughout 2010.

“Lloyds stands by its prediction made when it took over HBOS in January 2009 that it would turn out to be a good deal,” said Sky’s City editor Mark Kleinman.

The group has announced that chief executive Eric Daniels gave up a potential £2.3m bonus, but as Kleinman revealed last week, Lloyds has a £200m staff bonus pool.

It is now taking legal advice over the application of the Treasury’s ‘supertax’ on bank bonuses of more than £25,000, Kleinman said.

Category : Banking News

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