HBOS and RBS make up for lacking capital

[img_assist|nid=9404|title=|desc=|link=none|align=left|width=100|height=75]Massive asset write-downs are expected to occur at the UK banks HBOS and Royal Bank of Scotland, which are to receive more than £30bn of taxpayers' money. Besides, the two companies warn that full-year profits will most probably come lower than was projected.

5 billion pounds, this is the amount HBOS will likely write down as a result of declining value of Treasury assets. The move reflects the bank’s high need for capital. As for RBS the company will not publish its full-year profit estimate explaining it by the fluctuation in the world banking market.

Yet, markdowns on the banks’ holdings of mortgage-backed securities and other forms of tradeable debt can be limited due to the changes recently accepted by the Accounting Standards Board. Meantime, Lord Mandelson, the new Business Secretary, cleared the takeover of Lloyds TSB and HBOS.