The prices of office blocks, hotels as well as shopping malls have not reflected any sign of recovery and these factors together can play a role to worsen the loan quality in Ireland, claimed the Lloyds Banking Group Plc.

In a statement, the Lloyds notified that around 64% of its loans in the country is impaired, increasing from 53% at the end of 2010. Further, commercial as well as real estate prices have rolled down about 60% as compared to their peak in 2007, and anticipated a further fall.

The Lloyds shares were observed with a down fall of 4.5% at 37.21 pence by 0837 GMT. The losses on Australian loans have boosted with a hike of 29% as compared to previous year figures.

"We're long-standing bears on it”, added SVM Asset Management Managing Director, Colin McLean. "There was a slower rate of improvement on their (loan) impairments and a weakness in the UK housing market could lead to more impairment losses”.

Sources have confirmed that Lloyds is looking forward to expand its network and in a conversation with six parties including new bank venture NBNK and mutual Co-Op Bank. Its Chief executive, Antonio Horta-Osorio has notified reports to find a buyer by the end of 2011.