Lloyds shareholders respond strongly to cash call

| June 8, 2009 | 0 Comments

87% of new shares offered by Lloyds Banking Group have been bought by the bank’s shareholders.

Strong support was expected since the shares were offered at 38.43p - heavily discounted from last Thursday’s closing price of 67.1p.

Lloyds announced the cash call in order to replace the £4 billion of preference shares held by the Government in the bank for equity.

However, should the share offer have been snubbed, the taxpayer’s stake would have increased from 43% to around 65%.

The strong take up means taxpayers look set to receive money back from the bank.

Since the hasty takeover of rival HBOS (completed in January) Lloyds has eliminated around 3,000 posts.

At the time of the takeover, analysts said it was inevitable that the integration of the two banking giants was bound to create thousands of jobs losses because of the level of overlap between the two banks.

In related news, Sir Victor Blank, Lloyds’ chairman, announced his resignation last month. He and chief executive, Eric Daniels, faced criticism following the takeover of HBOS.

For the full 2008 year, Lloyds TSB (as it was previously known) made a profit of £807 million - an 80% fall compared with the previous year, while HBOS made a loss for the full year of £11 billion. The two banks together are expected to be in loss this year.

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