Old nby prediction on the money as Lloyds announce £42b write-off

Alistair Darling talked a good game about the Lloyds/HBOS takeover being ‘the ideal solution’. But it isn’t looking especially ideal this morning.

The Slog’s mother-site nby (Not Born Yesterday) has always had good contacts inside HBOS; the Slogger worked as a marketing and advertising adviser to the then Halifax for over a decade. A mole therein told me in mid 2009 that “the outstanding bad debt and other crap in the pipeline is unbelievable”. The piece was – needless to say – denied by everyone with something to deny.

Yesterday, the whopping £42 billion write-off hit shareholders in the crotch – and there are another £12 billion down the road aways. Thus the original Lloyds takeover sold to shareholders (purchase price £8 billion) now looks like one of those ‘Fly free’ airline tickets where the airport charges come to a grand.

More to the point, the write-off is four times the amount Lloyds lent in that fiscal year. As The Slog keeps on saying, Bankers are stupid and greedy – but they are also broke. They don’t have that much money to lend…as the Government knows perfectly well. And zero-rate interest doesn’t help.

Anyway,it’s good to see that things are all under control,and the worst is now behind us.