HBOS losses sink Lloyds’ shares

Lloyds Banking Group saw its share price go into freefall on Friday after revealing staggering losses of £10bn for HBOS in 2008.

At the time of going to press the group’s shares had regained some ground and stood at 64.8p, down 28%, having earlier fallen as low as 54.9p.

HBOS is expected to see an under-lying loss before tax of £8.5bn and further write-downs of £1.5bn for 2008. By contrast, Lloyds TSB is on track to show a profit of £1.3bn.

Eric Daniels, group chief executive of Lloyds Banking Group, says: “HBOS’ 2008 results were adversely affected by the market dislocation which accelerated significantly in the last quarter of the year, as well as the additional impairments re-quired on the company’s corporate lending portfolios.”