Carillion costs UK banks up to £200million each on loans

THE exposure of Britain’s High Street banks to the Carillion collapse is almost certain to rise, say City analysts.

The two big bailed-out banks - Royal Bank of Scotland and Lloyds - have written off a combined £300 million on the outsourcer. That number is likely to increase.

City analysts put Barclays’ exposure at between £150 million and £200 million.

In October, Lloyds said a £130 million rise in bad debts was thanks to a “single large corporate impairment”. That is now known to be Carillion.

RBS blamed the construction sector for a similar loss, now widely understood to be the building group.

Ian Gordon at Investec Securities said: “Following Carillion-related charges taken in the third quarter, I have no doubt we will see another round of ‘single name’ top-up charges in the fourth quarter.”

Within the banking sector, there is privately some finger-pointing as to who finally pulled the plug on Carillion, with some banks insisting they were willing to “extend and pretend” - offer more loans - in order to keep the company alive in the interests of the wider economy.

HSBC also has an exposure to Carillion, but is thought unlikely to declare it specifically, suggesting it will be nugatory compared with the size of the giant bank’s balance sheet. Santander is in a similar position.