Lloyds To Write Off 13 Billion In Bad Debt Loans
Just when everybody was beginning to think that the banking sector in the UK was starting to show signs of recovery, the Lloyds Banking group, the largest banking group within the UK, is expected to announce that it intends to write off somewhere in the region of £13 billion in bad credit loans when it publishes its half year accounts next month.
The bad debts include loans on commercial property, business loans as well as homeowner loans and domestic mortgages. It is expected that the bank will announce a pre tax loss of around £6 billion for the first six months of this year, with the figure projected to get worse by the end of the year.
It would seem that a large proportion of the bad loan debts which have been written off, have been inherited from the Halifax, on their corporate loan book, when Lloyds took the company over towards the end of last year and according to a report by the Sunday Times, the amount of £13 billion is approximately twice the amount which Lloyds actually paid for the Halifax.
It looks as though the recession is far from over for the Lloyds Banking Group, who are expected to have written off somewhere in the region of £20 billion worth of bad loan debts by the end of this year.
To make matters worse, the Lloyds group is one of the banks to receive funds from the government’s financial bail out package and is currently 43 per cent publicly owned, which means that once again it is the UK tax payer who is bearing the brunt of the banking sectors irresponsible lending attitude when it comes to offering loans to people who have no chance of ever paying them back.
