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magazine12.5%: Percentage of Lloyds’ loans deemed ‘high-risk’
Lloyds Banking Group (LLOY) is not as safe as investors may think, according to investment bank Berenberg. The latter is worried about Lloyds’ increasing exposure to high-risk consumer loans and says investors should sell their shares in the bank.
Lloyds’ plan to buy MBNA’s UK credit card business will double its exposure to higher-risk consumer loans to approximately 12.5% of its core UK loans.
Berenberg notes that Lloyds had one of the highest loss rates in each UK lending category in the Bank of England’s 2016 stress tests.
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