Lloyds not put off by HBoS £8bn write-downs

The banking group is to acquire HBoS and more than 95 per cent of its shareholders have already voted in favour of the deal.

Earlier today, HBoS revealed £8bn of write-downs across the banking group for the past 11 months, which was followed by a meeting in Birmingham for shareholders to vote on the proposed takeover by Lloyds.

Although the vote count has not been finalised, HBoS said it received "overwhelming support" for the tie-up.

In its trading update statement, Lloyds said: "The trading update from HBoS is broadly consistent with the impairment analysis conducted by Lloyds TSB as part of its review process in October 2008."

"Whilst the fair value adjustments can only be finalised after the completion of the acquisition and in accordance with market conditions at that time, the additional impairment losses being incurred by HBoS are not currently expected to have a significant impact upon the size of the net negative capital adjustments the Group is likely to make upon acquisition," the Lloyds statement said.

Meanwhile, it is also making a provision of £120m in its 2008 accounts as a result of the recent arrangements put in place to protect the depositors of Bradford & Bingley and other failed deposit-taking institutions involving the FSCS.

The Lloyds statement said: "Going forward further provisions in respect of these costs are likely to be necessary until the borrowings are repaid.

"The ultimate cost to the industry, which will also include the cost of any compensation payments made by the FSCS and if necessary the cost of meeting any shortfall after recoveries on the borrowings entered into by the FSCS, remains uncertain although it may be significant."

Earlier today, HBoS said it expects a £200m bill related to FSCS levies.

Lloyds has also written off the total value of its investment in Bradford & Bingley, acquired as part of the sub-underwriting of the Bradford & Bingley rights issue earlier in the year, amounting to approximately £30m.