HBOS’s significant exposure to the struggling UK property market is believed to be the main reason for its near-collapse.
Critics point out that HBOS unit’s approach had increased Lloyds’ risk profile considerably, and was responsible for part of the £6.8 billion of losses suffered by HBOS’s corporate bank in 2008. Subsequently, Lloyds announced that HBOS’s integrated finance unit will be closed and in future it will adopt the more conservative Lloyds model of lending either equity or debt to companies.
Lloyds has appointed City banker UBS to evaluate the selling of the stakes of HBOS assets that includes Polypipe, a manufacturer of piping systems, Sunseeker, the yacht-builder, and Premex, a medical outsourcing specialist. Other major stakes include TM Lewin, the shirt company, and RS?McColl, the newsagent, as well as Vue Entertainment, the cinema chain.
