Home | Email | Get AOL Toolbar | Help | Make AOL My Homepage
 Sunday, 22 November 2009
Money
| | | |
Powered by Google

Money Quiz

Finance Quiz
Test your Knowledge
Get Stock Quote for:

Economy over worst: Lloyds chief

posted : WEDNESDAY, 4TH NOVEMBER 2009 08:24:58 GMT comments : 8
- Search: Lloyds rights issue

Lloyds Banking Group is staging the UK’s biggest-ever rights issue
Lloyds Banking Group is staging the UK’s biggest-ever rights issue

Lloyds Banking Group said the economy was over the worst as it unveiled the UK's biggest-ever rights issue.

The firm is raising £13.5 billion from shareholders to avoid the Government's asset protection scheme (APS) as part of a £21 billion fundraising plan.

Chairman Sir Win Bischoff said: "The UK economy is now stabilising although we are far from having a rose-tinted view of prospects."

The improving conditions mean the bank has been able to drum up enough private interest to duck the APS, which would have seen it pay £15.6 billion to insure £260 billion in toxic loans - raising the taxpayer stake to 62%.

The bank still expects to make a loss this year, but said levels of bad debt were down in the second half of this year. It is looking for a stronger trading performance next year and in 2011. Retail bad debts reached £3.3 billion for the first nine months of the year, while its wholesale banking arm has racked up £12.9 billion in impairment charges so far. This is mainly down to the continuing decline in commercial property prices which devastated the HBOS loan book, although Lloyds expects overall bad debt charges to be lower next year.

The firm has also made faster than expected progress on cost savings from its acquisition of HBOS, which forced the combined bank into the arms of the Government. The Lloyds board has come under fire since the deal unfolded with punishing impact on 2.8 million private investors, who will now be asked to stump up for new shares.

Former Lloyds chairman Sir Victor Blank stepped down in September but chief executive Eric Daniels has also been under pressure. Sir Win dismissed suggestions that Mr Daniels should step down, saying: "We believe we have the right team in place to deliver our strategy."

The heavily-discounted rights issue will be accompanied by a debt conversion offer expected to generate £7.5 billion.

The Government will take up its rights as a shareholder in Lloyds to participate in the capital raising, investing £5.7 billion to maintain its stake at 43%.

    Micky 1
    Wednesday, 4 November 2009 15:32:01 GMT

    Does anybody believe that LLoyds bank shares will recover

    Dai220
    Wednesday, 4 November 2009 15:18:12 GMT

    Over the recession I don,t think so thing are still bad out there ask any small business trying to servive. But there is a bigger problem just around the corner private sector pensions the black hole is getting bigger its going to suck in more and more taxes off people that have to work until they are 70 before their get own pension. When public sector workers have final salary pensions paid by the tax payer and retire at 58.

    BLP (British Liberation Party )
    Wednesday, 4 November 2009 10:53:45 GMT

    I am sure the recession is over for the chairman of the group. While the rest of us are struggling to make a living these guys are counting their next multimillion pounds bounuses. Today I was saddened to hear that five more innocent British soldies died in Afghnistan. What a shame. I know the Christmas is going to be hell for thier families. Shame on you for sending these innocent lives to die for nothing.

    steve
    Wednesday, 4 November 2009 10:43:19 GMT

    since this credit crunch came from bad investments in stocks such as the subprimes in the usa, I am just wondering weather the banks are aware of those other so called backed securites like the option alms and ata-a morgages that will also be going into default. This multerverse bubble is not yet finshed,since whats going to be the outcome on the commercial property sectors.Bail outs serve no purpose until banks clear out their portfollios of bad investments.,which should be their first priority.

    Billybob
    Wednesday, 4 November 2009 09:34:35 GMT

    More Hype Before the New Year Slump when Vat Kicks in and Tax Bills Due for Companies and Self Employed are Due and more Importantly Banks start pulling the plug on companies that are on the brink now.And Lloyds has evaded the safety net scheme Fees by borrowing from us again so as sales of its Profitable parts can be sold off Debt Free. So whos going to pay us back then.A small company would be refused aloan like this and so should lloyds Be.i suppose like the High Speed Rail Link Farce £5billion it will be written off and we the taxpayer will be paying it back for 60 years or more.Get out "Gay" Gordon Now please

    PhilD
    Wednesday, 4 November 2009 08:19:21 GMT

    The worst is not over - it is just a ploy to get you to spend your money in the run up to christmas!

    Glen
    Tuesday, 3 November 2009 17:43:36 GMT

    " Economy over worst: Lloyds chief " Why doesn't he put his money where his moth is then, and instead of going cap in hand to the tax payers try raising the money from the markets ?Is the reason they horse as a logo becouse the boss can only talk pony ?

    cj
    Tuesday, 3 November 2009 16:48:06 GMT

    oh whoopi -do, they have managed to avoid the rules even though they have already dipped in the taxpayers coffers, no good hiding the bad news matey you still owe us our money.

    You'll be asked to register or login before posting a comment

    * Display Name (Screen Name or email address is not permitted)

    By submitting your comment, you agree to the AOL Web Services Agreement. If you feel a comment is in violation of AOL community Standards,you may report it using the 'Notify AOL' button.

    Guidelines At A Glance

    Below are some quick guidelines to note when posting comments on AOL.
    • Don't post unlawful, harassing, defamatory, abusive, threatening, harmful, obscene, profane, sexually oriented, homophobic or racially offensive comments.
    • Posts that aren't relevant lower the value of the discussion. Stay on topic.
    • Don't make multiple postings, keep your number of comments per topic to a reasonable level.
    • Please do not publicise anyone's contact details.
    • No advertising, promotion of products or services, or posting of web links (URLs).
    • You should never impersonate anyone, please refer to our Netiquette Guide.
    • Please note that your chosen display name is linked automatically to either your screen name or chosen email address for security purposes.

    Money Guides and Tools from AOL partners

    Clear Class
    Rss Module

    Supermarket deals 'worse than...

     Supermarkets are giving customers more money-off deals in the run-up to Christmas but they offer smaller savings than last year, research has suggested.
    Supermarkets are giving customers more money-off...
    rssModule
    Rss Module

    Alcohol prices 'could rise by...

     Alcohol prices could rise by 10% next year because of tax increases, the head of a major brewer has said.
    Alcohol prices could rise by 10% next year...
    rssModule
    Rss Module

    Competition to rename 'pensions'

     An insurance company has launched a competition to find a new name for pensions after research showed one in five people found the term off-putting.
    An insurance company has launched a competition...
    rssModule
    Rss Module

    Over 300,000 homes standing...

     The number of empty homes in England reached its highest level for five years during 2008.
    The number of empty homes in England reached its...
    rssModule
    Rss Module

    Warning over council tax scam

     Consumers have been warned to be vigilant after it emerged fraudsters were trying to trick people into handing over their bank account details through a council tax scam.
    Consumers have been warned to be vigilant after...
    rssModule
    Rss Module

    Diesel returns to £5 a gallon...

     Motorists are now having to pay £5 a gallon for diesel again, according to the AA.
    Motorists are now having to pay £5 a gallon for...
    rssModule
    Rss Module

    Extend scrappage scheme, urges...

     The leader of Britain's biggest business group has urged the Government to extend the car scrappage scheme until the general election to help the recovery from recession and boost employment.
    The leader of Britain's biggest business group...
    rssModule
    Rss Module

    Nationwide: Rates will remain...

     Building society Nationwide forecast a protracted recovery from recession and interest rates at record lows until "at least" the final quarter of next year.
    Building society Nationwide forecast a...
    rssModule
    Rss Module

    Insurers set for flood of claims

     Insurers were bracing themselves for a rush of claims from people hit by the flooding.
    Insurers were bracing themselves for a rush of...
    rssModule
    Rss Module

    Mortgage lending up five per...

     Mortgage lending rose by 5% during October as the market continued to recover from its traditional summer dip, figures showed.
    Mortgage lending rose by 5% during October as...
    rssModule
    Rss Module

    Supermarket deals 'worse than...

     Supermarkets are giving customers more money-off deals in the run-up to Christmas but they offer smaller savings than last year, research has suggested.
    Supermarkets are giving customers more money-off...
    rssModule
    Rss Module

    Alcohol prices 'could rise by...

     Alcohol prices could rise by 10% next year because of tax increases, the head of a major brewer has said.
    Alcohol prices could rise by 10% next year...
    rssModule