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Lloyds blames HBOS for £4bn loss Lloyds blames HBOS for £4bn loss
(10 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, which it took over in January.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 in January.
The group made a loss of £4bn in the first six months of 2009 after writing down the value of assets that are now worth less than previously thought.The group made a loss of £4bn in the first six months of 2009 after writing down the value of assets that are now worth less than previously thought.
The 43% state-owned bank took a charge of £13.4bn, mainly for bad loans, 80% of which came from HBOS.The 43% state-owned bank took a charge of £13.4bn, mainly for bad loans, 80% of which came from HBOS.
But it said it expected its results to start to improve in the coming months.But it said it expected its results to start to improve in the coming months.
BBC business editor Robert Peston said that the results are witness to the quite astonishing risks taken by HBOS. BBC business editor Robert Peston said the results bore witness to the quite astonishing risks taken by HBOS.
He added that the better news for Lloyds shareholders is that most of these poor quality loans are now being insured by us, by taxpayers, so future losses will be ours, not the banks. RESULTS ROUND-UP Barclays profit £2.98bnHSBC profit £2.98bnNorthern Rock £724.2m loss class="" href="/2/hi/business/8179311.stm">Crunch time for UK banks class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/498/0/default.stm">Check banking sector shares
He added that the better news for Lloyds shareholders was that most of these poor quality loans were now being insured by taxpayers, so that future losses would be borne by the taxpayer, not the banks.
Lloyds said it was in talks with the government about the insurance scheme, which is known as the Asset Protection Scheme.
It would insure Lloyds against further losses from bad loans, but would probably lead to the government increasing its stake in the bank.
Lloyds predicted that its charges for bad loans would be smaller in the rest of 2009 and that there would be an upturn in the economy in 2010.
Because of accounting technicalities related to its takeover of HBOS, Lloyds made a pre-tax profit of £6bn for the period.
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Lloyds predicted that its charges for bad loans would be smaller in the rest of 2009 and predicted that there would be an upturn in the economy in 2010. But the group said that as a result of the takeover of HBOS, that figure was "of limited benefit".
Due to accounting technicalities related to its takeover of HBOS, Lloyds made a pre-tax profit of £6bn for the period. 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 compared with a £2.8bn profit for the same period last year.
But the group said that as a result of the takeover of HBOS, that figure is "of limited benefit". Lloyds' shares rose 4.5% to 88 pence in the first hour of trading.
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.
Lloyds' shares rose 6% to 89.4 pence in the first half hour of trading.