HBOS takes £180m hit

13-12-2007

HBOS takes £180m hit
HBOS, Britain's fourth-largest bank, has confirmed it has taken a £180 million hit on the value of assets due to the global credit crunch.

But in a pre-close trading statement, the company stressed it was still set to meet market earning expectations for the full-year.

The bank also confirmed its exposure to the US subprime mortgage market represented less than 0.1 per cent of the group's balance sheet, having been reduced from £550 million at the end of August to £430 million at the end of November.

Other financial institutions have been harder hit by the credit crunch and subprime crisis, with rival British bank Barclays last month revealing it faced a £1.3 billion write-off on credit-related securities tied to the collapse of the specialist US mortgage market.

Earlier this week Lloyds TSB confirmed it expected to take a £200 million hit as a result of the recent turmoil in the credit markets, prompted by rising default levels in the North American subprime sector.

HBOS said despite current credit market conditions, it expected to report a good outcome for 2007 – anticipating underlying earnings per share of 106p.

But the bank stressed it would "remain prudent" about its approach to lending, expecting the problems in the credit markets to continue in the short-term.

"HBOS is set to deliver a good full year outcome despite the dislocation in global financial markets," said HBOS group chief executive Andy Hornby.

"We continue to build on the strengths of our UK franchise and are seeing real benefits from our investment in targeted international expansion," he added.

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