Lloyds set to write off £450m debt

Published on Sunday 14 June 2009 21:42

LLOYDS Banking Group is thought to be set to write off £450 million on its investment in pubs group Admiral Taverns, which has been hit by the property slump.

The group's Bank of Scotland arm lent more than 850m to Admiral, which owns more than 2,000 pubs, in order to finance a string of acquisitions.

But with pub values slashed in the recession, the estate is now thought to be worth less than 500m.

Reports yesterday claimed that the bank is sounding out potential buyers of its debt, resulting in the potential write-off.

Lloyds warned last month that charges on corporate loans turned sour would be more than 50 per cent above 2008 this year – mainly due to lending practices at HBOS, which Lloyds rescued last year.

HBOS's losses on corporate loans reached 7 billion last year – meaning this year's write-down is likely to be at least 11bn.

A spokesman for Lloyds Banking Group declined to comment.

&#149 Meanwhile, it emerged that Lloyds is thought to be looking for a major shake-up of Edinburgh property developer Kilmartin in a bid to stave off its administration. The bank, which owns 50 per cent of the troubled firm, has lent it 250m.

It is thought that Bank of Scotland, which has been in crisis talks with Kilmartin since the end of last year, could bring in property veteran Kevin McCabe to salvage as much as possible from the firm.