UK banks brace for losses on loans to broadband challengers

NatWest and Lloyds are among the big banks braced for losses on billions of pounds in loans to troubled UK broadband providers, as the weakest players in the nascent fibre sector battle mounting financial pressure. Dozens of “altnets”—alternative network providers—have tried to challenge the dominance of BT’s Openreach and Virgin Media O2 but many are struggling to attract enough customers to meet the costs of their network rollout and have been hit by higher interest rates. Lloyds Banking Group said that its commercial banking unit had set aside £25 million to cover loans that were unlikely to be repaid in full. Its chief financial officer, William Chalmers, said these provisions were largely isolated to loans for the fibre sector. Chalmers said the sector had suffered “bumps in the road” because of “higher construction costs” and “lower subscriber numbers than people had originally anticipated”.