RE: Telegraph deal done1 Dec 2023 13:30
The outcome will be a stunning one for Lloyds and its chief executive Charlie Nunn, who had rejected a series of partial repayment offers from the family lodged after the Telegraph's holding company was placed into receivership during the summer.
In addition to the £700m value of the principal loan, the Barclays are paying more than £400m in interest which has accrued over many years.
"The writeback is pure profit for Lloyds and will flow straight to the bank's bottom line," the analyst said.
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One person close to the situation said Lloyds had written down the majority, but not all, of the loan's original £700m value.
A writeback of over £500m is therefore expected to contribute a meaningful proportion of the bank's 2023 annual profit.
Analysts say the company is already generating significant sums of excess capital and that the absence of a substantial acquisition would therefore give Lloyds' board the freedom to return the Telegraph loan windfall to shareholders.