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Lloyds To Exit Ireland As Losses Blight Recovery

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Lloyds is set to hand back its Republic of Ireland banking licence as it ceases taking on new business in the country, which has been responsible for a billions of pounds in losses for the bank.

From the end of this year, Bank of Scotland (Ireland), a Lloyds subsidiary, will cease operations while its €30bn (£25bn) of assets will be transferred to its UK parent's balance sheet.

Earlier this year, Lloyds announced the closure of its 44 Halifax branches in Ireland, with the loss of about 750 jobs.

The bank's withdrawal from Ireland will affect 840 staff. However, only about 36 are expected to lose their jobs as a result of the change, according to a source close to Lloyds.

In a statement Lloyds said it saw "little opportunity for scalable growth in the future" from its Irish business, which made a £1.56bn loss in the first half of the year.

Problem loans in the Irish business make up 43pc of Lloyds' £26.7bn lending portfolio in the country.

The closure of the business will leave 150,000 individual account holders looking for a new bank, with Lloyds saying it would help depositors make a "smooth transition".

The Irish banking market has been among the hardest hit in Europe by the financial crisis, with the country's largest banks requiring billions of euros in support from the government.

Allied Irish Banksx this month reported a record loss for the first half, losing €2.03bn over the period largely as a result of continued losses on its lending on Irish real estate.

Ireland's other banks also remain hard hit, in contrast to Britain's largest financial groups which returned to profits as impairments against toxic assets declined and core businesses performed strongly.

What’s happening here? Is it a case of recognising that Ireland is dead and not worth resuscitating, so they start cannibalising assets to keep the UK ticking over for a few more months?

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