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Lloyds sees HBOS loss of £10.8bn | |
(about 7 hours later) | |
Lloyds Banking Group has said that HBOS, which it absorbed in January, made a pre-tax loss of £10.8bn in 2008. | |
Meanwhile, Lloyds TSB has seen its own profits for 2008 fall by 80% to £807m, in what is said was a "resilient underlying business performance". | |
Lloyds also said it was in talks with the Treasury about placing toxic assets in the government's new asset protection insurance scheme. | |
And the banking group said it faced another "challenging year" in 2009. | |
'Excellent brands' | |
HBOS was hit by £9.9bn of losses on bad loans. | |
The huge losses announced by Lloyds Banking Group further illustrate the dire straits in which the financial system finds itself Derek Simpson, joint leader of union Unite | |
At Lloyds, losses caused by "market dislocation", the slowdown in the UK economy, and the impact of falling house prices, came to £3bn. | |
Referring to its takeover of HBOS, Lloyds said that it had "acquired a franchise that brings extensive distribution, a large customer base, good people and excellent brands". | |
When the deal was originally announced in September, the government backed the move using a special national interest clause, on the grounds that a collapse of HBOS would have had a disastrous impact on the UK. | |
This got around any potential anti-competition objection. | |
The new Lloyds Banking Group controls about 25% of British customers' personal bank accounts and about 28% of the mortgage market. | |
Sector-wide woes | |
The whole group is 43% owned by the taxpayer, and the government has already poured £17bn into the Lloyds Banking Group. | |
It comes a day after Royal Bank of Scotland revealed a record UK loss of £24.1bn and a new bail-out worth up to £25.5bn. | |
"We know the short-term outlook for the enlarged group is challenging," said Lloyds chairman Sir Victor Blank. | |
"Whenever economic conditions do begin to normalise, however, we believe we will be in a very strong position to reap the benefits." | |
Lloyds' five executive directors have all voluntarily agreed to forego any bonus they may be awarded for 2008. | Lloyds' five executive directors have all voluntarily agreed to forego any bonus they may be awarded for 2008. |
"The huge losses announced by Lloyds Banking Group further illustrate the dire straits in which the financial system finds itself," said Derek Simpson, joint leader of union Unite. | |
"More than ever it is essential that the new Lloyds Banking Group retains and protects its hard working staff." |