Bailed-out English lender Lloyds faces more than 2 times the risk from its mortgage debt portfolio than any other major UK bank, according to the Financial Times.As much as 25% of the company’s loan portfolio may be mortgages with high risk ratings.
The data comes from the Bank of England, and it shows that the 13% of Lloyds mortgage lending holdings represent mortgages worth more than the underlying housing asset.
The FT explains the dangers of these loans:
The danger of these kinds of loans is that home buyers who make insignificant deposits are considered more likely to fall into arrears. High loan-to-value ratios also pose the risk of bigger losses if borrowers default.
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