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British bank HBOS on course for 'resilient' 2008 PDF Print E-mail
Friday, 20 June 2008

AFP, LONDON - British bank HBOS forecast on Thursday that it would deliver a "resilient" performance this year, despite the ongoing impact of the global credit crunch and slowing economic growth.

"Trading continues to be satisfactory and remains in line with the group's expectations," said HBOS, which owns Halifax, Britain's biggest provider of home loans.

"While HBOS is not immune from the global dislocation in financial markets that is impacting the wider economy and credit conditions, it is on track to demonstrate a resilient performance in 2008."

HBOS added that credit-crunch writedowns grew to 1.03 billion pounds (1.30 billion euros, 2.02 billion dollars) in the five months to the end of May.

That was 58 million pounds higher than the figure given for the first three months of 2008.

The update came ahead of a shareholder vote later this month on plans for a rights issue totalling 7.9 billion dollars (5.0 billion euros).

HBOS is asking investors for extra cash to strengthen its balance sheet after experiencing heavy writedowns related to the credit crunch, which was caused by the collapse of the US subprime or high-risk home loan market.

The bank also forecast that Britain's faltering housing market would experience a heavy fall this year.

"The decline in (British) house prices is now forecast to be up to 9.0 percent in 2008, which will have an adverse impact on secured impairment charges," the bank said.

"The overall increase in arrears levels ... is in line with our expectations at the beginning of the year."

HBOS also predicted that the number of British house sales would slide by 45 percent this year, compared with 2007, amid "subdued" market conditions.

In recent months, the country's property prices have fallen heavily as banks have tightened their mortgage lending criteria.

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