HBOS admits loss on BankWest
The importance of the sale of BankWest and St Andrews Insurance in Australia to UK-based banking group HBOS has been made clear in documents filed with the Australian Securities Exchange detailing the group’s broad financial position, including its acquisition by Lloyds.
BankWest is to be acquired by the Commonwealth Bank Group, and in the document issued by HBOS today, it said the transaction to be completed before the end of this year would result in a pre-tax loss of some £690 million (including goodwill written off), but was positive in terms of the effect on capital ratios.
HBOS also pointed to the losses it had incurred with respect to its treasury portfolio and said that as at September 30, losses due to market dislocation had totalled £1,827 billion, including £457 million in impairment losses on the banking book relating to Lehmans and Washington Mutual.
It said further impairment losses of around £150 million were expected to be taken in relation to Icelandic banks.
The HBOS statement added that while the credit environment would remain challenging, “the injection of capital and liquidity facilitated by the UK Government” reinforces the group to meet such challenges.
It noted that its opportunities to pursue growth “will be further advanced as HBOS joins the enlarged Lloyds TSB Group in January 2009, subject to shareholder and regulatory approvals”.
AUTHOR
Mike Taylor
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