More bad news for the UK taxpayer emerged this morning as Lloyds Banking Group shares took a tumble of 20% on the back of it’s takeover of HBOS and the latest profit warning put out on Friday by the latter sending shockwaves through the market amid fears it may require further state capital or even worse need to be fully nationalised.
Unbelievably Lloyds appeared surprised when it announced on Friday that HBOS would make a pretax loss of £10bn, in excess of expectations due to a jump in losses on corporate loans at the tail end of last year. The news had the immediate effect of wiping a third off the value of shares in the bank on Friday and has continued to see further losses on the stockmarket this morning.
Eric Daniels chief executive at Lloyds had previously given no indication of the problems at HBOS, but has said that his bank would have put in 3-5 times more due diligence on the takeover if it had not been so hurried.
If that is true, it is apalling that this takeover ever happened. Were Lloyds that desperate for State aid that they would take on a business riddled with debt that they had no idea about?
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