Lloyds TSB mortgage loans put into government insurance scheme
10/03/09
UK’s largest mortgage bank Lloyds have been included in the group’s most toxic assets and put into the government’s insurance scheme in order to help the company against the decrease in house prices.
Mortgages worth over £74bn have been included among £260bn of assets placed under the taxpayer protection scheme. This will see the government’s stake in Lloyds rise to nearly 77 per cent.
Majority of these toxic home loans have come from HBOS which was taken over by Lloyds TSB in January.
During February Lloyds TSB were told that 1 in 6 HBOS originated mortgages were in negative equity during the end of 2008.
HBOS mortgages also accounted for home repossessions and other arrears from £28m to £1.13bn.
Lloyds commented: "The board is completely behind the management. It is imperative we have a strong balance sheet behind us at a time like this when the UK is moving into a very difficult economic situation." He also said that the bank had bought "cost-effective protection" for its most troublesome assets.
