Lloyds Banking Group makes £110m loss as it exits Irish ‘disaster’

Lloyds Banking Group brought an end to a disastrous foray into the Republic of Ireland on Friday, offloading a £4 billion mortgage book for a loss of £110 million.

Britain’s biggest High Street bank ditched most of its Irish assets years ago, with today’s deal a near-final exit.

Barclays have stumped up the cash for the mortgage book, which has £300 million of impaired loans.

Lloyds said the sale is in line with its strategy of “becoming a low-risk, UK-focused bank” and its completion will leave the group “with minimal exposure to Ireland”.

Ian Gordon at Investec said the Lloyds-HBOS move into Ireland was “an unmitigated disaster” that had led to losses of £12 billion and been a big part of the reason the bank needed a Government bailout in 2008.

The mortgage book generated a loss of £40 million in the last year. Lloyds shares were today flat at 66p.

Shore Capital said that today’s deal should boost the balance sheet and argued the shares are worth 80p.

The City thinks the Irish exit should enable it to boost its dividend next year. Lloyds said the proceeds from the mortgage book sale would be used for “general corporate purposes”.

Lloyds last month reported a profit of £2 billion for the first quarter of the year.

Chief executive Antonio Horta Osorio has been bullish on the UK economy, saying it will benefit from low unemployment.