Lloyds slumps to $15 bln loss, in asset plan talks

Lloyds Banking Group said it had not finalised details of its plan to put billions of pounds of assets into a UK government-backed insurance scheme, as it unveiled a 10 billion pound loss for 2008.

Lloyds said on Friday that HBOS — the mortgage lender it took over in January — suffered a 2008 statutory loss of 10.8 billion pounds ($15.4 billion) as it was hit by 9.9 billion pounds of losses on bad loans and credit market losses.

Lloyds said the former Lloyds TSB business made a statutory profit of 807 million pounds, down from 4 billion pounds, as its impairments jumped to 3 billion pounds.

HBOS's loss was in line with guidance Lloyds gave two weeks ago in a profit warning. It indicates that the combined group made a statutory loss of 10.1 billion pounds, compared with a combined profit of 9.4 billion in 2007.

Lloyds said talks with the UK government on an asset insurance scheme "are progressing and are well advanced".

Chief Executive Eric Daniels said he would provide an update "reasonably shortly" and declined to comment further.

The bank had been expected to announce it was putting over 250 billion pounds of assets into the plan.

Its shares were called to open down 5 percent, having rallied 31 percent on Thursday on optimism that terms of the plan would be more favourable than earlier expected.

The government owns a 43 percent stake in Lloyds, after supplying 17 billion pounds under a rescue plan in October.