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Lloyds £289M Losses Revealed

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Lloyds £289m losses revealed

By Sarah Bridge

11 July 2010, 1:50am

The disastrous legacy of HBOS's forays into private equity is revealed this weekend with the disclosure of huge losses at its remaining investment vehicle, Uberior, now part of Lloyds Banking Group.

Just a week after Lloyds finally offloaded the majority of Bank of Scotland's Integrated Finance division for £480m after enormous write-downs, accounts just filed for the remainder of its private equity businesses showed it plunged further into the red.

Uberior Investments - the name means 'abundant' in Latin - made a loss of £289m in 2009, up from £80m the year before, according to its latest report.

The investment vehicle bought heavily into property and retail companies, including builder Crest Nicholson, McCarthy & Stone retirement homes, Wyevale Garden Centres, rubbish collection firm Biffa and yacht maker Sunseeker.

Controversial banker Peter Cummings, who is credited with landing HBOS and its new owner Lloyds with £7 billion of bad debts that it had to write off last year, used to head Integrated Finance and was a director at Uberior, its holding company.

Uberior's latest accounts are a far cry from the heady days before the global financial meltdown. In 2007, it recorded a profit of £519m and paid dividends to the value of £280m.

That year it accounted for one tenth of the entire HBOS profits and Cummings was paid £2.6m. In 2008, a £350m dividend was paid out, but in this latest set of accounts the dividend has been scrapped entirely.

The deficit comes from huge write-downs in the value of its investments - from £954m to £596m - as well as £11.6m in interest payments. Figures from the Integrated-Finance division are not included.

Last week Lloyds announced the sale of its stakes in 40 companies that were part of Integrated Finance, including fitness club chain David Lloyd Leisure, shirt maker and retailer TM Lewin and D&D Restaurants, to a joint venture between Lloyds and Coller Capital called Cavendish Square Partners. Coller paid £332m for its 70% stake.

Nice to see losses on property are moderating. I like this line:

The deficit comes from huge write-downs in the value of its investments - from £954m to £596m

Looks like BOGOF to me.

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Wonder how Cheltenham and Gloucester also did iirc now wound up but was part of lloyds. a lot of the ******ups seem to be ex building societies like northern rock bradford bingley abbey national alliance and leicester halifax time to end demutualisations>?

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