Mortgage giant braces itself for bumper write down
HBOS prepares to shore up reserves following hefty write down with a rights issue
The UK’s largest mortgage lender, HBOS, is expected to reveal a write down of
up to £3bn tomorrow at its annual shareholder meeting.
The board is also expected to decide whether to go ahead with raising up to
£4bn in capital through a rights issue to bolster its reserves.
The HBOS’s core tier 1 ratio, a measure of its strength, stands at 5.7%
higher than the Royal Bank of Scotland which last week announced a £12bn rights
issue to boost itself from a ratio of 4% to 6%.
HBOS has made gloomy predictions of the UK economy and forecast a modest
single digit decline in UK house prices this year.