UK GOV’T: NO LLOYDS TAKEOVER

The UK government said it doesn’t plan to take full control of Lloyds Banking Group Plc after the lender forecast a 10 billion pound ($14 billion) loss at its HBOS Plc mortgage unit.

Lloyds agreed to buy HBOS in a government-brokered takeover in September when the UK’s biggest mortgage lender came close to collapse.

Lloyds warned of the larger-than-expected loss at HBOS on Feb. 13, and since then the stock has dropped 38 percent.

Analysts say the bank may have to raise further capital from investors if losses at HBOS worsen.

The UK government, which owns 43 percent of the lender, is “not contemplating” nationalization, Stephen Timms, chief secretary to the Treasury, told the British Broadcasting Corp. earlier yesterday.

“We’ve made it very clear that in our view the commercial sector and private ownership is the right place for banks.”