This is Lloyd's Bank, one of Britain's largest, but it is not the same as Lloyd's of London, now known as Lloyd's International, the famous insurance firm.
Government may have to take full control of Lloyds
By James Kirkup
6:16PM GMT 13 Feb 2009
Ministers have been warned they will be forced to take full control of Lloyds Banking Group after its shares fell by a third amid huge losses.
Britain's biggest high street bank shocked the City by announcing almost £11 billion of losses last year, more than twice what banking analysts had expected.
The Government already holds a 43 per cent stake in Lloyds after injecting £17 billion into the bank last year.
The bank's shares closed down 32.5 per cent last night. The fall leaves taxpayers with a paper loss of nearly £10 billion on the government's investment.
Lloyds Banking Group was formed by the merger of Lloyds TSB and HBOS last year. In a government-brokered deal, Lloyds agreed to rescue the stricken HBOS after it came close to collapse.
That deal came under fresh scrutiny as it emerged that most of the enlarged bank's losses - some £7 billion - came from HBOS's lending business.
The HBOS loss is more than twice what the bank itself had forecast for 2008 and raised questions about Lloyds' financial health after the merger.
Eric Daniels, the Lloyds chief executive this week admitted to MPs that his bank had done only a fraction of normal "due diligence" analysis of HBOS before agreeing to buy it.
The loss also sparked predictions that the state will eventually have to buy the bank outright.
George Osborne, the Tory shadow chancellor, expressed fears for Lloyds' survival.
He said: "The scale of the losses at HBOS are staggering and now risk dragging down Lloyds too. The taxpayer money pumped in through the first bailout in October is all but wiped out by these losses."
Vince Cable, the Liberal Democrat Treasury spokesman, said Lloyds may no longer be viable as private company.
He said: "It looks increasingly as if Lloyds is being dragged under by the dead weight of HBOS. It looks increasingly as if Lloyds HBOS will now go into majority public ownership, followed inevitably by nationalization."
Mr Daniels insisted that his bank's long term prospects remain healthy.
He said: "Whilst we recognise that the short term outlook is more challenging Lloyds Banking Group has the largest UK financial services franchise with excellent long-term earnings potential."
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