Lloyds stays in profit while HBOS posts £10.8bn loss
by Gill Montia
Lloyds Banking Group has reported that profit at its Lloyds TSB business plummeted by 80% in 2008, to £807 million. Revenue fell 8% to £9.9 billion.
Meanwhile, the group’s HBOS subsidiary and the UK’s leading mortgage lender, posted a loss of £10.8 billion.
The merger of Lloyds TSB and HBOS was completed in January following a hurried Government-backed deal that stemmed from the October banking crisis and left the taxpayer with a 43% stake in the new group.
Since the takeover, serious allegations about HBOS’s attitude to risk have come to light with a former head of risk at HBOS alleging that he was fired after warning former chief executive, Sir James Crosby, that the bank’s pace of growth was dangerous.
Sir James resigned as deputy chairman of the Financial Services Authority earlier this month, as a result.
In the company of Royal Bank of Scotland, which reported a £24.1 billion loss yesterday, Lloyds Banking Group will be making use of the Government’s new Asset Protection Scheme, which allows banks to clean up their balance sheets by dumping off bad debt and toxic assets.
Lloyds is expected to put up to £250 billion into the guarantee scheme, for which it will pay a fee of around £6 billion.