Lloyds share price: Lender allegedly forced businesses into loan defaults
Lloyds Banking Group Plc (LON:LLOY) has been accused of influencing property valuations with the purpose of forcing companies into default, The Times has reported. The allegations appear in a report by Manchester-based law firm Berg.
Lloyds’ share price gained ground on Friday, closing 0.92 percent higher at 84.33p. The blue-chip lender’s shares have added some 15 percent over the past year.
The Times reported today that Lloyds is facing claims that it “downvalued” commercial property to put its business customers in breach of the loan-to-value ratios on their secured debts. This allegedly allowed the bailed-out lender to exit lending positions which were no longer commercially attractive. The claims are presented in a report by law firm Berg which claims that Lloyds had ‘real motivation’ for the move, namely to boost its balance sheet. A spokesman for the blue-chip told The Times that Berg’s allegations did not make “commercial sense”.
“It is always in the bank’s interest to get the maximum price possible and is aligned to the customer’s best interests,” the spokesman pointed out, adding that the bank “would not benefit in any way from falsifying values”.
Correspondence from the Serious Fraud Office seen by the newspaper suggests that the agency has been looking into similar allegations about the bank as part of its broader interest in the conduct of the restructuring units of high street lenders. The news comes with bailed-out peer Royal Bank of Scotland Group Plc (LON:RBS) having also been accused of pushing small businesses into default. The allegations, presented in a report by government adviser Lawrence Tomlinson in November 2013 suggested that RBS had forced small company clients out of business to acquire their assets on the cheap.
As of 08:15 BST, Monday, 13 July, Lloyds Banking Group share price is 84.33p.