Lloyds edges closer to signing up to Government’s Asset Protection Scheme

| March 6, 2009 | 0 Comments
”Lloyds

Lloyds Banking Group, created following the merger between Lloyds TSB and HBOS, is edging closer to reaching a deal with the Government, with regard to taking part in the Asset Protection Scheme.

The scheme, which insures against losses arising from toxic assets, will see the Government’s stake in the bank increase from 43% to 60%. Lloyds is expected to insure up to £250 billion of assets, according to the BBC.

As part of the deal, Lloyds would convert the preference shares held by the Government into ordinary shares, which draw no interest.

However, Lloyds has stated that there is no guarantee that it will take part in the scheme. A spokesperson for Lloyds Banking Group said talks are ongoing and there was still “a good deal of detail to be worked through”.

Royal Bank of Scotland (RBS) was the first bank to sign up to the scheme which will see the Treasury insure £325 billion worth of assets.

It is anticipated that by participating in the scheme, RBS will reduce risk for shareholders whilst providing greater support for UK customers via increased lending.

Last week, Lloyds Banking Group revealed a £10.8 billion loss for 2008 at HBOS, while Lloyds’ own profits plummeted by 80% to £807 million, which the bank described as a “resilient underlying business performance”.

Tags: , , ,


Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply


Visited 3727 times, 1 so far today