Lloyds Banking Group has today announced an underlying loss of £4billion for the first half of 2009, as HBOS' bad debts take their toll.
According to the interim results, HBOS' bad debts accounted for 80 per cent of Lloyds Banking Group's overall bad loans.
BBC business editor Robert Peston claims that the results are testament to "the quite astonishing risks taken by HBOS."
However, Lloyds bosses remain confident that the 43 per cent taxpayer owned institution's results will start to improve. Chairman Sir Victor Blank said:
"I have a great belief in the exciting prospects for the Group going forward. We are strongly positioned for long-term success with a highly experienced management team focussed on delivering the significant potential of the new business."
Nevertheless, Lloyds Banking Group's share price increased by seven per cent this morning according to The Share Centre, but investment adviser Nick Raynor warns:
"Investors hoping to profit from day trading in banks should be wary as we foresee further bad debts and rights issues within the sector. As Lloyds now has the biggest exposure to UK consumer debt we are listing the bank as a tentative weak hold."
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