Lloyds HBOS over 10 billion loss stuns the market

As long predicted by this blog the HBOS takeover looks as though it will now take down Lloyds. The following is from The Guardian, linked here:

The new Lloyds Banking Group stunned the City this afternoon by issuing a profits warning after admitting that the losses incurred by HBOS would amount to £10bn, much larger than previous forecasts.

Its shares plunged 40% at one stage to just 54.9p.

The sharp rise in the loss is the result of a £1.6bn increase in the impairment charge to £7bn to cover loans which have turned sour largely in the corporate division which was run by Peter Cummings who has since left HBOS.

The size of loss that will now be reported by HBOS, which was rescued by Lloyds TSB to create the new bank, is even greater than the £7bn-8bn loss that Royal Bank of Scotland warned that it expected to make. The total RBS loss will reach £28bn when £20bn is written off because it paid too much for the Dutch bank, ABN Amro, and other deals.

The Times Online report on the same news is here. Strange is it not that this is reported as a surprise. More should read this blog which reported exactly this outcome on the day the merger was first announced and asked many questions all of which remain unanswered, read it here. Enter "Lloyds Hbos" in the blog search bar above to see how often these questions and concerns were repeated and ignored! The BBC reporter on business Mr Peston who has been ever verbose on this topic has added his two pennyworth here.