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Lending losses worsen for Lloyds

01 March 2010 5:30PM
One seventh of the loan book of the Lloyds Banking Group business in Australia ranked as impaired at the end of December 2009, financial statements for the group published in Britain on Friday night show.Lloyds already held the claim to the steepest level of impairments of any bank operating in Australia, and things worsened, a little, over the second half of 2009.Of £14.1 billion in total lending in Australia, Lloyds classed £2.3 billion as impaired and equal to 14.4 per cent of advances. At the half-year Lloyds said 12.5 per cent of loans in Australia were impaired.Lloyds raised provisions over £966 million of these loans, or 48 per cent of impairments.The bank took an impairment charge to the profit and loss of £849 million relating to lending in Australia, representing 6.2 per cent of average advances as compared with 3.1 per cent as at June 2009.Most of the troubled loans are ones originated by HBOS (rather than by Lloyds), with more than half the loans for commercial property. Lloyds formally acquired the HBOS group, with extensive aid from the British government, in early 2009. (The Australian retail banking business, BankWest, was sold to Commonwealth Bank prior to then.)

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