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“Dai-Ichi Securities”– HBOS Lending Practices Haunt Lloyd’s…

Todays Date: November 21, 2018

“Peter Marsh”: The ill-fated merger between Lloyd’s and HBOS has more skeletons lurking.

Dai-Ichi Securities, the Asia-based asset management firm, believes that the true scale of the dubious lending decisions made by HOS before its merger with Lloyd’s TSB has yet to emerge.

The firm is convinced that a significant proportion of the loans made by HBOS may have been protected by the unprecedented low interest rate environment that has prevailed in the UK since the onset of the financial crisis but its analysts suggest that when interest rates rise, losses at the combined group will mount.

Losses at the Lloyd’s Banking Group for 2009 topped £24bn thanks to writedowns in the wholesale arm and also its international business.

“Dai-Ichi Securities” believes that the bank – over 40% of which is owned by the UK taxpayer following bailouts last year that cost the UK more than any other developed nation.

“Dai-Ichi Securities” said that HBOS, which included Halifax – once Britain’s biggest mortgage lender – had made the mistake of thinking that the property boom in the UK was sustainable and was as much to blame for the substantial writedowns as the borrowers themselves.

Lloyd’s TSB, prior to the merger, had been a fairly prudent lender which had little exposure to the subprime debacle that many of its competitors had invested in when purchasing the collateralized debt obligations that eventually saw their values plummet as property values in the US plunged.

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