I have Lyg on my watchlist and love the dividend yield and their supposedly conservative management.

Never been to UK so not sure how big they are on main street.

The thing that worries me most is their SIV of abour 25 Billion. Research on net say about 2/3 of stuff in it are loans by other institutions that LYG is insuring with their balance sheet. 

While Lloyds might be conservative - one thing from US subprime mess is when someone else is buying loans - people give out undeserving loans out. 2/3 of 25 billion is big exposure. They do not seem to be keeping enough reserves to write down any where close to that even compared to others in UK market (Barclays, etc)

On the other hand I do not see real estate market sinking like in US. US people can walk away from house in UK there are only so many houses. While prices might drop steadily - UK can rectify lot easily - free up immigration a bit or like. With US still in close down/uninviting mode - UK has lot of space to rev up biz with immigration.

Time to back up truck on the stock or wait and watch ? 

Please would love to hear thoughts of knowledgeable people here.

Thanks for reading.