HBOS Shares Fall Sharply on Lower Corporate Lending and Margins (Bloomberg) (27-02-2008)

Feb. 27 (Bloomberg) -- HBOS Plc, the U.K.'s biggest mortgage lender, lost as much as 10 percent following its announcement today that the outlook is “uncertain." Second-half earnings declined 8.9 percent to 1.93 billion pounds ($3.84 billion), or 50.9 pence a share, after writedowns on subprime mortgage-related investments.

HBOS, which includes the Halifax and Bank of Scotland, abandoned its mortgage-market targets in October.

HBOS fell 67 pence to 646 pence as of 10:10 a.m. in London, the most since the bank was formed in a merger almost seven years ago. The stock has lost 44 percent in the past year, compared with a 26 percent drop for the nine-member FTSE 350 Banks Index.

The bank said profit was hurt by a 227 million-pound writedown related to asset-backed securities. The company said it expects this fair value adjustment to its holdings to reverse over time. HBOS also lowered the valuation of debt securities it holds by 509 million pounds, an adjustment which doesn't affect profit, the company said.

 Source Bloomberg