Thursday, Jun 19, 2008
HBOS £5bn headache prompts downgrade
Times: HBOS reveals £5bn in problem home loans ahead of rights issue
BTL and selfcert are the real UK subprime. Standard & Poor's, the ratings agency, knocked HBOS's rating down from “stable” to “negative” because of the potential hit to its business from Britain's slowing economy. Expect another lively rights issue.
Posted by confused76 @ 11:04 PM (405 views) Add Comment
5 Comments
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1. mark wadsworth said...
Woah!
£5 bn of 'problem loans' doth not equate to £5 bn of losses!
Worst case they write off 10%, that's £500 million, which is what the £4 bn rights issue is supposed to cover!!
2. Fingerbob69 said...
Mr Hornby insisted nothing would derail the capital raising: “Our rights issue is fully underwritten, it's on track and we're going to get it completed and get back to normal life.”
Ok. Would someone please provide a workable definition of 'normal life', for a high street bank, in this crazy mixed up world, which those crazy high street banks are currently find themselves living in.
3. Dontpanic said...
"Our rights issue is fully underwritten, it's on track and we're going to get it completed and get back to normal life.” ......I have to wonder how long that will be. HBOS shares look cheap at the moment....but then they only have £5 bn of problems....at the moment!.
4. confused76 said...
sure, sure
of course 5bn problem loans and that s it ... right?
5. a saver said...
But if they have £5bn problem loans now, what might they have in a year's time when house prices have fallen maybe 20%, not to mention spiralling energy and food prices, job losses etc? And it's not as if they are demanding very large deposits from their mortgage customers, to hedge against further HPC.