Lloyds incurs $6.8bn loss in first half

LONDON: Britain’s Lloyds Banking Group sank to a 4 billion pounds ($6.8 billion) loss in the first half, battered by a surge in bad debts from its HBOS business, but the bank told investors it was through the worst.

Britain’s biggest retail bank said on Wednesday its impairment losses for the six months to June jumped to 13.4 billion pounds, more than five times the 2.5 billion pounds a year ago and up from 12.4 billion in the previous six months.

But it said the impairments — some 80 percent of which came from the business of beleaguered rival HBOS acquired in earlier this year — peaked in the first half, reflecting its tough valuation of real estate assets badly hit in the credit crunch.

“Consumer impairments and normal corporate impairments — non-property related — will peak a year or two after the trough of the recession, but because we have taken a prudent view on the property book, we expect this to be the top of our total impairments,” Lloyds Chief Executive Eric Daniels told Reuters.

He added 70-80 percent of the impairments would be included in a government-backed asset insurance plan, which aims to limit the bank’s exposure to losses on bad loans. The bank is still in talks to finalize terms for the complex scheme, Daniels said.