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Wednesday 17th of June 2009
June 15, 2009

Lloyds in £450m write-off on Admiral Taverns loan


by Kay Murchie
”Lloyds

Banking giant, Lloyds Banking Group, is expected to take a hit of £450 million as a result of its investment in pub chain Admiral Taverns.

In order to finance a series of acquisitions, the group’s Bank of Scotland arm loaned more than £850 million to Admiral but the pub group, which owns more than 2000 pubs, has been hit by the downturn in the property market.

As a result, the estate is now thought to be worth less than £500 million.

Furthermore, the pubs sector has been hit by cut-price competition from supermarkets, rising beer duty and the impact of the smoking ban, which was implemented almost two years ago.

Lloyds, which is 43% owned by the Government following a £17 billion rescue last autumn, warned last month that charges on corporate loans turned sour would be more than 50% above 2008 levels - primarily due to lending practices at HBOS, which Lloyds hastily took over last year.

Lloyds is also expected to plunge into a loss this year, following the takeover of HBOS, which made losses of nearly £11 billion last year after writing off bad debts.

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Tags: Admiral Taverns, , estate, , , , , pubs,

 

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