Lloyds Banking Group: Rescue Efforts Successful
As evidenced in their annual report for 2010 released on February 25, the Lloyds Banking Group noted that businesses in the UK show signs of recovery, largely due to rescue efforts by their Business Support Unit (BSU). Even though the total amount of impaired loans grew to £64.6bn, impaired business loans fell slightly from 2009 to £34.5bn of which £15.5 were real estate corporate loans.
In an effort to rescue many of these corporate ventures, Lloyds has turned over these loans to the management of their BSU that has helped a good number of UK companies to avoid business bankruptcy. Even though they are dealing with new impaired assets within the corporate real estate portfolio, some of those impaired loans have been offset by having sold previously impaired assets and by writing off other irrecoverable assets.
Lloyds further stated that their group will continue to “invest heavily in expert resource” which will enable them to continue helping their business customers to restructure in order to be sustainable with the hopes of protecting employment wherever possible.
The thrust of rescue efforts in the UK is focused on avoiding insolvency through rescue efforts which is why this particular report released by Lloyds is so important. Although the change from 2009 is small, it is movement in the right direction.
Considering that impaired corporate loans in 2009 totalled £9.36bn, the £6.64bn in 2010 impaired corporate loans was a major improvement. However, it is noted in the report that a good deal of the present impaired commercial loans is the result of the economic turmoil in Ireland.
The group has also reduced its reliance on liquidity support from governmental and other financial institutions and furthermore, they receive no such support from either the European Central Bank or the United States Federal Reserve. As a result, their efforts on their own behalf are quite extraordinary.