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Lloyds To Write Down $82 Billion By 2010

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From Bloomberg:

July 21 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s biggest mortgage lender, will post writedowns of 50 billion pounds ($82.2 billion) by the end of 2010 as rising unemployment causes bad debts to soar, said Sandy Chen, Panmure Gordon & Co. banking analyst.

Lloyds’s impairments will rise to 23.5 billion pounds this year from 15 billion pounds in 2008, Chen said at a meeting with reporters in London today. Bad debts will reach a similar level next year before declining in 2011, he added.

“We won’t be post-crisis until 2012,†said Chen, who has a “sell†rating on Lloyds. “There’s no sector in the economy providing an outlet for the newly unemployed.â€

Lloyds, 43 percent owned by the government, has cut almost 9,000 jobs this year and is considering asset sales after a 7.7 billion-pound takeover of HBOS Plc, previously the country’s biggest mortgage lender, caused the quality of the bank’s loan book to deteriorate.

Lloyds’s first-half profit will be “very strong†because of accounting gains from the HBOS takeover and a 6 billion-pound gain as a result of a debt-swap, Chen said.

A London-based spokeswoman for Lloyds declined to comment. The stock rose almost 2 percent to 73.44 pence in London trading today, valuing the bank at about 20 billion pounds. The shares have tumbled 70 percent in the past 12 months.

Chen had a “sell†rating on HBOS since August 2007, HSBC Holdings Plc and Barclays Plc since September 2007 and Royal Bank of Scotland Group Plc since October 2007.

U.K. unemployment will peak at about 12 percent, Chen said, from its level of 7.6 percent at the end of the second quarter.

http://www.bloomberg.com/apps/news?pid=206...id=ar9W7sv_Atns

:o:o:o:o

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Lloyds’s impairments will rise to 23.5 billion pounds this year from 15 billion pounds in 2008, Chen said at a meeting with reporters in London today. Bad debts will reach a similar level next year before declining in 2011, he added.

...

Mmm - time to pull my ISAs out of Lloyds methinks...

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I've been trying to figure out where to open another account myself..Lloyds hasn't given me a reason to stay loyal. I'm thinking building societies, not sure which one...

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I've been trying to figure out where to open another account myself..Lloyds hasn't given me a reason to stay loyal. I'm thinking building societies, not sure which one...

Newcastle BS has a good ISA offer - 5% I think, with no penalties on 90 day withdrawal. But is that place farked as well?

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Newcastle BS has a good ISA offer - 5% I think, with no penalties on 90 day withdrawal. But is that place farked as well?

I have **** all because of losing my job a while back, I'm looking for good student overdraft offers really...

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Newcastle BS has a good ISA offer - 5% I think, with no penalties on 90 day withdrawal. But is that place farked as well?

closed when I last looked...3% now.

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This is all one big game for them of what the future might hold . I can pretty much guarantee that they are overstating or rather being ultra prudent on these writedowns and perhaps as much as a quarter of them will be get written back into profits post 2011. Equally lloyds is having to play a huge game here with the govt becasue if it is forced ( as it should be in my view ) to shed brands ( eg halifax) then it cannot go too far with cost cuts or integration or it will end up destroying value rather than creating it... with the shareholders ( tax payers) in mind the govt and the opposition should get on now and make a firm decision on whether Lloyds will have to divest post recession or not.... if it won't have to then it can cut costs, and integrat6e now. If it will have to divest of some business(es) then it can plan accordingly now and make the most of a bad deal.... to delay the decision on what will happen to lloyds makes it difficult for the taxpayer to get the best returns from this.

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...caused by the lack of proper due diligence by the current Board....and a 'helping' hand introduction from this Government...the current Board should resign now...the losers are us the taxpayers, the Lloyds shareholders and all the Lloyds staff who have and are going to lose their jobs...The FSA should never have permitted this merger with HBOS but they were in the Government's pockets.... <_<

Edited by South Lorne

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I have **** all because of losing my job a while back, I'm looking for good student overdraft offers really...

You have **** all but expect someone to lend you money?

Stick with the parents - they probably won't want to suck your blood.

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You have **** all but expect someone to lend you money?

Stick with the parents - they probably won't want to suck your blood.

*facepalm*

The banks have been doing it fine thus far. Its for a degree y'know, thats kind of the point. Graduate earnings are higher on average which is why they take that risk. Interest-free overdrafts for students have been around as long as I can remember.

So I'm a leech because I worked hard and my company got consumed by the unrest in the Middle East? Forget it, I'm wasting my time responding any further...

Edited by HPC001

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