Lloyds Banking unveils $12 billion HBOS loss

[Joanne98]

LONDON (Reuters) - Part-nationalized Lloyds Banking Group (LLOY.L) said its HBOS unit made a hefty loss last year due to a bigger-than-expected rise in bad loans, wiping a third off its value and raising fears more state help will be needed.

HBOS had a pretax loss of 8.5 billion pounds ($12.3 billion) for 2008, Lloyds said in a statement on Friday, driven by 7 billion pounds in bad corporate loans and a 4 billion pounds in asset writedowns.

In December, HBOS had estimated its corporate bad loans for the 11 months to November 30 at just 3.3 billion pounds.

Lloyds shares closed 32.5 percent lower at 61.4 pence, having earlier fallen as low as 54.9 pence.

"Obviously we need to digest the detail, but it looks increasingly as if Lloyds HBOS will now go into majority public ownership, followed inevitably by nationalization," said Vince Cable, finance spokesman for the opposition Liberal Democrats.

http://www.reuters.com/article/ousiv/idUSTRE51C3HR20090213