Lloyds reports £4bn in losses for 2009
Lloyds Banking Group are the next major bank to reveal losses after releasing the first half year figures from 2009. The group has put the mounting losses down to its acquisition of HBOS, which took place in January.
The firm made a £4billion loss from January to June this year, which was worse than originally expected, after the value of all assets were recorded but the total cash equivalent amounted to less than previously anticipated.
The banking group, which is part-nationalised – 43% owned by the state, took on £13.4billion, the majority of which was made up of bad loans, with 80% of this belonging to HBOS.
But it has said that it expects results to show signs of improvement in months to come.
Lloyds shareholders can grasp some comfort in knowing that most of the poor quality loans taken on by the group are now being insured by taxpayers, so that the taxpayer would foot the bill for any further losses as opposed to the bank.
Lloyds has recently been in talks with the government to discuss the insurance scheme, known as the Asset Protection Scheme.
The scheme would protect Lloyds from falling victim to further losses from bad loans, but this would leave it vulnerable to the government increasing its stakes in the group.
The takeover has also made it difficult to collect data for the first six months of 2008 to compare the latest figures, but Lloyds has said that it made a profit of £2.8billion for the same period in 2008.
In the first hour of trading, Lloyds’ shares made a 4.5% rise to 88 pence.
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Article Source:http://www.articlesbase.com/banking-articles/lloyds-reports-4bn-in-losses-for-2009-1120959.html
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