Lloyds Banking Group Holds 60% of Risky Mortgage Loans

In its Financial Stability Report published on June 24th, 2011 The Bank of England highlighted that UK banks have given out too many risky mortgage loans. Risky loans stand for mortgages with high and very high loan-to-value ratio (LTV). A high LTV ratio is believed to be 70% to 90%, while very high LTV ratio is anything above 90%.

The large proportion of these loans is concentrated in a few banks. Lloyds Banking Group tops the list of banks with risky mortgage loans on its book as almost 60% of Lloyds home loans are risky. It is followed by the Royal Bank of Scotland (40%) and Santander UK (35%). Then come Nationwide (30%), Barclays (20%) and HSBC (10%).

Experts at the Bank of England are concerned that many of these home loans might result in property repossessions as a large number of UK households is currently are risk of job cuts, income reduction or interest rates growth.

If you are interested in the full Financial Stability Report, please, visit the official website of the Bank of England. The paper is available for free download in the Publications section.

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