Commercial property losses peaked -- BoSI
Published 28/04/2010 | 05:00
Bad-loan losses in Bank of Scotland (Ireland)'s commercial property portfolio peaked last year, according to the bank's owner Lloyds Banking Group.
Irish property and construction loans are estimated to stand at about €12bn -- accounting for about 37pc of BoSI's total loan book. It set aside €3.3bn to cover impaired loans last year.
BoSI, headed by Joe Higgins, outlined a dramatic retrenchment in February, with plans to shut down its 44-branch Halifax network and other retail businesses. All told, some €10bn of retail loans will be run down. In a trading update yesterday, Lloyds said bad-loan losses remained high in the Irish commercial real estate portfolio.
"However, the level of impairments in the first quarter of 2010 was lower than the past quarter of 2009 and we continue to believe that we are past the peak for impairment losses in the division," it said.
Lloyds said it remains "vigilant to changes" across its overall wealth and international division, which includes BoSI, and that it continues "to monitor the position of the Irish economy in particular".
Lloyds, which is 41pc-owned by the UK government, revealed yesterday that it had already returned to the black in the first three months of the year.