U.K. lender, Lloyds Banking Group Plc said that bad loans will drop "significantly". The bank had a loss of more than five billion dollars in the first half. However, money was put aside to cover mounting real estate loans.
The U.K.'s largest mortgage lender was seeking more than a fifteen billion dollar bailout after it had decided to purchase HBOS. The deal was brokered by the government to prevent the band from folding. The deal left Lloyds with nearly 80% of its bad loans.
Richard Champion stated, The HBOS loan losses are severe......Looking forward, they are saying we are getting back to more normal conditions and loss levels are stabilizing, which will be taken positively.
The latest news sent the stock up more than 10%, after being the 2nd lamest performer in the FTSE 350 Banks Index.
