Lloyds Banking Group has written off more than £1 billion sterling (€1.18 billion) in bad loans relating to its Irish business.
In its half-year results published today, the London-based bank, which owns Bank of Scotland (Ireland), said total loan impairments from its international business was £1.4 billion.
The bank reported a net loss of nearly £1.1 billion for the first six months of the year on its international business outside of the UK which it said was primarily due to increased impairment losses driven by the economic downturn in Ireland and Australia.
Lloyds said it expected the impairment charge relating to its international business, to decline in the second half of 2009 and be significantly lower next year but it said there remained “ongoing concerns” about the outlook for the Irish economy.
Ireland has experienced a significant deterioration in impaired assets driven by a collapse in liquidity in the property market, it said in a statement accompanying its results.
Bank of Scotland (Ireland) is currently undergoing a review of its operations in Ireland with a downsizing or possible closure of its retail arm, Halifax, under consideration.
Overall, the bank posted a first-half loss of £3.1 billion as HBOS’s reckless lending took its toll.
The bank, which is 43 per cent owned by the British government, said impairments on bad debt rose “significantly” to £13.4 billion, largely due to HBOS.