Bad debts double but HBOS deal is still on
FINANCIAL market turbulence and exposure to Lehman’s collapse and the Iceland banking crisis have sent bad debts soaring at HBOS.
The owner of Halifax and Bank of Scotland said it had doubled its writedowns against exposure to toxic assets and bad loans to more than £5.1billion in the first nine months of the year, up from £2.5billion at the halfway stage.
The figures in a trading update include £457million against losses in Lehman and Washington Mutual, and £150million in writedowns from Icelandic banks.
Its retail banking business saw bad debts against home loans double to £440million.
Lloyds TSB said it was planning writedowns of £10billion against the value of HBOS once its takeover was complete. Its decision follows 5,100 hours of due diligence on HBOS’s books.
The takeover was on track, it added, dismissing former HBOS executive Jim Spowart’s claim a foreign bank was planning a counterbid.
“I’m not losing sleep over it. We’ve heard nothing tangible whatsoever,” said Lloyds TSB chairman Sir Victor Blank.
