Lloyds faces multi-million pound losses on Kilmartin collapse
by Gill Montia
Lloyds Banking Group could be facing substantial losses over the collapse of Kilmartin Holdings.
The Scottish property developer has been placed in administration with debts to HBOS in the region of £500 million.
Kilmartin built a reputation as a major UK developer, working on projects across the country including Wynyard Business Park in Teeside and a waterfront scheme in Southampton.
However, its assets are understood to be worth only around £300 million, leaving Lloyds with a £200 million shortfall, even with the most optimistic of outcomes.
HBOS’s head of corporate banking prior to its merger with Lloyds TSB has been criticised for the lender’s level of exposure in the UK property sector.
Peter Cummings left the bank in December 2008 after 37 years with his employer and his legacy would appear to have contributed to HBOS’s losses being a the worst end of expectations since its merger with Lloyds TSB.