RPT-PREVIEW-Bad loans to hit UK banks, Lloyds set for H1 loss

(Repeats story from July 31)

*HSBC, Barclays to report half-year results on Monday

*Standard Chartered (Tues), Lloyds (Weds), RBS (Fri)

*Investment bank earnings strong, but retail bad debts jump

*Lloyds seen posting 5.1 billion pound loss

*HSBC $4.9 bln profit seen despite $15 bln in bad loans

By Steve Slater and Myles Neligan

LONDON, July 31 (Reuters) - Britain's Lloyds Banking Group
(LLOY.L) is set to unveil a 5 billion pound ($8.3 billion) loss
as bad debts soar and its four UK rivals will also show the
strain when they report half-year results next week.

Investment bank revenue for all the banks is expected to be
buoyant after a strong recovery in capital markets activity this
year, but losses on mortgages and commercial loans will weigh on
the retail parts of the businesses, analysts predict.
[ID:nLK122719]

Retail-focused Lloyds is expected to sink to a pretax loss
of 5.1 billion pounds for the six months to the end of June,
compared with a restated 2.8 billion pound profit a year ago,
according to the average of six analysts polled by Reuters.

The scale of bad loans will the key focus, and the bank's
first-half impairment charge could hit 11.1 billion pounds, more
than four times a year ago, according to analysts at Keefe,
Bruyette & Woods.

Lloyds, which bought ailing rival HBOS last September and
weeks later surrendered a 43 percent stake to the government in
return for a 17 billion pound bailout, may also provide a
progress report on efforts to absorb HBOS, a process that is
expected to include disposals.

HSBC (HSBA.L), Europe's biggest bank, should post a
first-half profit of $4.9 billion on Monday, according to the
average of 11 analysts polled by Reuters.

That would be half of its profit a year ago as bad loan
losses are expected to swell to $14.9 billion for the six
months, according to the average of 10 estimates.

HSBC's North American arm is likely to post a $5.2 billion
loss as loan impairments rise to $4.5 billion for the second
quarter from $4 billion in the first quarter, Nomura estimated.

HSBC's results will be distorted by a number of one-off
items, however.

The near $5 billion profit forecast strips out a $4.7
billion loss in income related to accounting rules on currency
moves affecting its rights issue [ID:nLL606853]. But it does
include an expected $2 billion reversal on the fair value of its
own debt and a $1 billion writedown on toxic assets.

BARCAP BOON

Barclays (BARC.L) is likely to be one of Europe's winners
from buoyant capital markets and should post a first-half profit
of just over 3.5 billion pounds, according to the average of
seven analysts, up 29 percent from a year ago.

Barclays Capital's profits may top 2 billion pounds as
writedowns on toxic assets decline and it benefits from last
year's acquisition of Lehman Brothers in the United States and
strong debt, currency and commodities revenues. [ID:nLO222955]

Higher bad debts in its retail and commercial banking will
eat into group profits and it will also see big distortions --
including an 800 million pound gain on debt it bought back,
writedowns of over 2 billion pounds, and about a 500 million
pound reversal on its own debt, according to analysts.

Its great rival Royal Bank of Scotland (RBS.L), 70 percent
owned by the state, is expected to post a pretax profit of 1.2
billion pounds compared with a loss of 691 million pounds a year
ago, according to the average of four analyst forecasts
collected by Reuters.

The bank's anticipated return to profitability reflects
one-off gains on disposals and bond buybacks as well as a strong
sales performance from its GBM investment banking unit.

Both RBS and Lloyds are expected to provide an update on
talks with the government over how much they must pay to join a
scheme under which the taxpayer will absorb a proportion of any
further losses on risky credit assets they hold.

Analysts say the final terms of the so-called asset
protection scheme, which will cover 325 billion pounds of RBS'
assets and 260 billion of Lloyds', will have a critical
influence on the banks' future bad debt exposure.

Standard Chartered (STAN.L) is expected to report first-half
earnings dipped 4 percent from a year ago to just under $2.5
billion, according to the average of five analysts' forecasts.

The Asia-focused bank reported record levels of income and
profit in the first five months of this year, thanks to "a very
strong performance" in wholesale banking, but income dropped in
consumer banking, where bad debts have risen. [ID:nLP44217]

The following are forecasts for first-half results, based on
the average forecast from analysts polled by Reuters. Full-year
results are based on Reuters Estimates average. Losses are in
parentheses. In pounds unless indicated:

BARCLAYS: Results due Monday 0700 BST, based on 7 forecasts
H1 2009 PRETAX YEAR AGO RANGE FY 2009 PRETAX

3,540 2,754 3,071-4,099 5,960

HSBC: Results due Monday 0915 BST, based on 11 forecasts
H1 2009 PRETAX YEAR AGO RANGE FY 2009 PRETAX
$4,900 $10,247 $3,360-6,321 $9,157

STANCHART: Results due Tuesday 0930 BST, based on 5 forecasts
H1 2009 PRETAX YEAR AGO RANGE FY 2009 PRETAX
$2,490 $2,586 $2,247-2,624 $4,250

LLOYDS: Results due Wednesday 0700 BST, based on 6 forecasts
H1 2009 PRETAX YEAR AGO RANGE FY 2009 PRETAX
(5,100) 2,775 (6,147-2,881) (8,100)

RBS: Results due Friday 0700 BST, based on 4 forecasts
H1 2009 PRETAX YEAR AGO RANGE FY 2009 PRETAX

1,210 (691) (2,122)-4,614 (4,300)

(Editing by Erica Billingham)