Lloyds faces £450m hit

by Richard Kilner

Story link: Lloyds faces £450m hit

Lloyds Banking Group could be in a for a further financial hit, with the Scotsman reporting the bank may have to write off an investment in pub chain Admiral Taverns to the tune of £450m.

Admiral, which possesses over 2,000 pubs, took a loan of £850m in order to support an acquisitive strategy.

Unfortunately the collapse of the property market has hit the group hard, with its total portfolio now thought to be worth under half a billion pounds.

Lloyds Banking Group emerged from a swift takeover by Lloyds TSB of stricken banking rival HBOS, which last year incurred corporate loan losses of some £7bn.

Since the epic merger, Lloyds has become 43% owned by the British taxpayer, and Reuters reports it may have to sell units due to EU rules governing state assistance for businesses.

However, Lloyds has warned that this year’s losses are thought to be half again as large, meaning an estimated £11bn could be written off.