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Bad debts lead to loss at Lloyds Lloyds blames HBOS for £4bn loss
(21 minutes later)
Lloyds Banking Group says it has made a loss in the first half of the year, due to mounting bad debts at HBOS. Lloyds Banking Group says it has made a loss in the first half of the year, due to mounting bad debts at HBOS, which it took over on 16 January.
The group said it made a loss of £4bn in the first six months of 2009, but accounting technicalities mean it made a pre-tax profit of £6bn in the period. The group made a loss of £4bn in the first six months of 2009 after taking a huge charge on assets that are worth less than previously thought.
The bank, which is 43% owned by taxpayers, said it took a charge of £13.4bn on bad loans. The 43% state-owned bank took a charge of £13.4bn for such write-downs, 80% of which came from HBOS.
Lloyds said 80% of those bad loans had been made by HBOS, which it took over on 16 January. But it added that the write-downs had now probably peaked.
Due to accounting technicalities, Lloyds actually made a pre-tax profit of £6bn for the period.
But the group said that as a result of the takeover of HBOS, that figure is "of limited benefit".
The takeover also means that it is difficult to find figures for the first six months of 2008 with which to compare these figures, but Lloyds said that the £4bn loss compares with a £2.8bn profit for the same period last year.