The UK financial watchdog has fined Lloyds Banking Group £45.5m for failures at one of its businesses to disclose suspicions of fraud. 

The fine for the failings at an HBOS branch in Reading closes one of the remaining regulatory chapters after the financial crisis a decade ago when Britain had to bail out several lenders. 

Halifax Bank of Scotland (HBOS) was involved in one of Britain's biggest ever banking frauds in the early 2000s.

This saw some of its bankers enrich themselves at the expense of struggling business clients, some of whom succumbed to insolvency after being advised to borrow unsustainable amounts. 

HBOS was rescued in a state-engineered takeover by Lloyds in 2009. 

The Financial Conduct Authority (FCA) says HBOS identified suspicious conduct in Reading in early 2007 but did not tell the regulator until 2009, the year Lloyds acquired the bank. 

Six people including two former HBOS bankers were jailed in 2017 for a combined 47 years for their role in the fraud. 

The FCA said HBOS failed to be open and cooperative and failed to disclose information appropriately to the then regulator, the Financial Services Authority (FSA). 

The bank's failures caused delays to investigations by both the FCA and police, said Mark Steward, the FCA's executive director of enforcement and market oversight. 

"There is no evidence anyone properly addressed their mind to this matter or its consequences," Mr Steward said. 

The watchdog also banned Lynden Scourfield, Mark Dobson, and husband and wife David Mills and Alison Mills, who were all convicted in 2017 in a fraud trial related to the Reading case, from working in financial services. 

"The director of the impaired asset team at the Reading branch, Lynden Scourfield, had been sanctioning limits and additional lending facilities beyond the scope of his authority undetected for at least three years," the FCA said. 

Lloyds Banking Group said it welcomed the FCA's "comprehensive investigation" and accepted the findings of past disclosure failure associated with fraud at HBOS in Reading. 

"The group accepts the findings, has agreed to pay a fine of £45.5m and apologises once again to customers affected by the fraud itself," the bank said in a statement. 

The fine would have been £65m but was discounted by 30% after the bank agreed to resolve the matter. 

The then FSA appointed investigators to examine the misconduct, but the probe was put on hold from 2013 to 2017 to allow for the criminal prosecution to be completed. 

The events at Reading continue to dog Lloyds. 

At the bank's annual meeting last month, investors questioned the lender's handling of fraud at the Reading branch. 

British television personality Noel Edmonds has alleged his former entertainment business collapsed as a result of the HBOS Reading fraud. 

Lloyds has said 71 business customers at HBOS Reading have been offered compensation and 98% have accepted those offers.