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Lloyds faces a £200 million hit after property company collapse

Lloyds bank today stands on the verge of a potential £200 million hit after the collapse of Thornfield Ventures. This is an operation which was backed by Lloyds bank's HBOS division to the tune of around £500 million. The main parent company and three subsidiaries are now in administration with a potentially enormous loss on the cards for Lloyds bank.

Even though there has been some recovery in the UK economy and the UK property sector, we will see a number of smaller property companies struggling to survive in the weeks and months ahead. Cash flow is king at the moment and with a slow stream of sales in the sector it looks as though many other companies will also be feeling the pinch. The main banking groups in the UK have always had a large exposure to the UK property sector and while Lloyds has hit the headlines today it could be any one of the major UK institutions tomorrow.

This is all the more frustrating for the likes of Lloyds bank which is trying to draw a line under past problems and rebase itself for the future. However, it looks as though this may not be the only property company collapse which will hit the headlines in the short term.

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