So you won't have any Rights allocation Fred? The last lot were certainly worth having, which doesn't necessarily mean this lot will be, but am reasonably optimistic.

Damian Reece -- Published: 12:04PM GMT 16 Nov 2009

Bankers and traders will kick and scream at the idea of individual contracts being subject to state scrutiny, although I'm confident most will find their way through the manifold loopholes which such remuneration law generally contains. Their employers likewise will join the cacophony of protest at what look fairly unconstitutional proposals.

There will be plenty of noise from another constituency too, but this time it will be the sound of popping Champagne corks. From what we know, the Bill looks like a massive work creation scheme for the City's law firms, whose remuneration, it seems, is not affected by the proposals.

We can expect a "bonus transfer" to a degree, from bankers to those lawyers employed to protect their incomes. For the economy as a whole, lawyers will take up the slack so estate agents and car dealers can keep ticking over. Phew. So far as lawyers are capable of being brash (most are too sensible to indulge in ostentatious displays of wealth) we should at least expect some loosening of the top button after this week's Queen's Speech.

No, the group who have most to lose but who will fail to make their justifiable case heard are shareholders, particular the big institutional shareholders who manage our savings and pensions.

With its suite of banking reforms, including pay, the Government is effectively wresting a huge amount of ownership control from shareholders and taking it for itself - without compensation.

Banks, especially in the UK, are becoming answerable primarily to the state for their actions, with shareholders fast becoming a poor second.

To some extent this is fair. Without the taxpayer standing behind all banks, shareholders would have faced complete wipe out. As it is they still have an economic interest in a sector beginning to revive. They have seen huge amounts of their value wiped out - certainly at Lloyds Banking Group and Royal Bank of Scotland - but such zombies have at least been given the chance to live again.

Anyway, much of this value destruction was down to the status of "absentee landlord" which most institutions adopted in the run up to Northern Rock and the ensuing crisis.

But this justification for state intervention only goes so far.

The entire economy benefited from the emergency action instigated by Government. It wasn't just the denizens of the Square Mile, Canary Wharf and Mayfair who contributed to the crisis.

Many other groups were culpable. Many businesses took excessive risks. Consumers were irresponsible as were politicians and regulators.

Yet no other industry is being targeted with specific laws, even though management allowed terrific risks to be taken and, in many cases, lost.

That's because it is not deemed appropriate for the state to intervene. It's for shareholders to decide if management is doing its job properly - if not then shareholders have the power to act, to terminate employment subject to contract.

Banks, it is argued, are different and require specific laws applicable to them because of the risks they pose to the system as a whole. Tougher rules on banks' capital requirements and liquidity are therefore being introduced internationally.

In the UK, banks will have to disclose how they can be wound up in emergency and retail banking separated from investment banking without the former being infected by the latter.

These are all reasonably sensible. But individual terms of employment were not to blame for the credit crisis - that was caused by a toxic confluence of behaviour encouraged by the easy availability of cheap money - a situation blessed by regulators and law makers the world over.

Laws that allow the state to nullify contracts already signed between two private parties are bad laws.

Regulators will ultimately have to rely on some highly subjective and debatable opinions as to what constitutes remuneration that threatens the stability of the financial system as a whole.

That's why the Financial Services Bill is a lawyers' charter.

But more fundamentally we cannot allow the state to use this crisis to limit our freedoms further.

Bankers may not be the most edifying bunch to defend but there are important principles at stake. It's up to shareholders to stand up for their ownership rights and not allow contract law to be so brazenly usurped by the state.

But these days they seem more interested in box-ticking corporate governance measures. The sort of thing that last week saw a bunch of them getting in an entirely mistaken lather about the non-executive roles of Sir Philip Hampton, chairman of the Royal Bank of Scotland.

Sadly, shareholders seem incapable of organising themselves into an effective voice or being able to adopt effective strategies. Many of them are the sort of blue chip organisations that the Government is wholly reliant on when it comes to the functioning of the gilts market, for instance.

This is a market without which the Government's runaway deficit would be impossible to fund. Institutions are not without leverage. They should start to use it before it's too late.

Harry,

I haven't held on for the rights offer and sold what I held a little while ago.

I find the Banks accounts and valuations to complex for me to understand and my previous holds were based on comment, simple understanding of basic fundamentals and the charts.

But in the present market turmoil, I feel that the share price may drop back to rights price if not below it.

If I was to buy, I would prefer to see the prices after the offer and buy accordingly.

I may have missed 5-10% profit, but happy buy on a uptrending share price.

Good luck if you hold.

I would think in 2years time it will have returned a decent overall profit.

RNS chairman Sir Win Bischoff buys 250,000 shares @ 89p.

He can afford to!
8-)

They are moving well ahead now, they have reached 92.50p a few minutes ago, up 2p while the market is down
and the rest of the banks also, though RBS wants to follow LLOY


On 16th November 2009, 250,000 ordinary shares of 25p each in Lloyds Banking
Group were purchased by Chase Nominees Limited on Sir Winfried Bischoff's behalf
at 89.691p per share.

just tooo much money around. Revaluation (assets and mortgage market) will move it to ... up

Not sure I agree with you Fred about the drop in the sp. My feeling is that there is a great deal of cash about waiting to take up the rights (assuming the price is favourable) so I would expect the issue to be very popular, thus supporting the sp.
Of course, each to their own strategy. Med term, I agree that LLOY are a good investment.

from Investors Chronicle .................

Bank stock picks
Created: 17 November 2009
Written by: Nic Clarke

In the last two weeks, there have been numerous announcements covering third-quarter trading, capital raisings and the UK Government Asset Protection Scheme (APS). We felt that there would be clear winners and losers due to the financial crisis and events over the last couple of weeks support that view.

Standard Chartered, which we recommend investors accumulate, has been our favoured bank through the crisis. It is the only bank share that is trading above its pre-crisis levels. The wholesale bank reported a strong and broad-based third-quarter income performance, with expenses under control and a low impairment charge. In its consumer bank, which has suffered in recent quarters, income has grown despite margin pressure on the deposit side and impairments have fallen. We also like the group's strong liquidity.

We also have recommended 'accumulating' shares in HSBC. Profitability for the first nine months of the year was stronger than expected. Global Banking & Markets maintained its record performance, and although loan impairment declined in its US consumer finance unit (in run-off), the improvement may prove temporary.

Despite strong investment banking results, Barclays' shares are a hold. Profits fell back in the first nine months of 2009 due to higher impairments. Parts of the retail business are struggling, but Barclays said impairments may peak this year rather than in the first half of 2010, and it has restarted paying dividends.

We also recommend holding Lloyds Banking Group shares. It announced that it does not intend to participate in the government APS and is to raise 13.5bn in a rights issue and at least 7.5bn of "contingent capital". According to Lloyds, the EC state aid remedies will not be "material" to the group, trading is in line with expectations and synergies will be over 1.5bn. However, a dividend is unlikely until 2012.

RBS is also a hold. The third-quarter loss of 1.5bn compares with 3.5bn in the preceding three months. However, the important news was that although it has shrunk the size of the assets covered by the APS and also the fees paid, it is required to make materially more disposals than it had expected. We believe it is going to be a long hard slog for RBS.

http://www.investorschronicle.co.uk/MarketsAndSectors/Sectors/article/20091117/11b89e6c-d37c-11de-8eea-00144f2af8e8/Bank-stock-picks.jsp

The wait is over for Lloyds as Brussels gives green light to government bailout

Lloyds Banking Group will put 600 branches and its Cheltenham & Gloucester and TSB brands up for sale after the European Commission gave its approval to its state-aid settlement.

The sign-off by Brussels ends months of wrangling between the bank, the Treasury and the Commission and clears the way for Lloyds to raise 21 billion through a rights issue and debt-for-equity swap by the end of the year.

Lloyds goes to shareholders to ratify record-breaking 13.5bn cash call

Lloyds Banking Group is this week expected to announce the terms of its record-breaking 13.5bn cash call on investors. The share issue will require the taxpayer to pump an extra 5.8bn into the bank.

Skinny;- I read the News you posted, but wonder exactly "who" will be buying these shops? They can't be sold as a "trading business" since LLOY wants to take the business for themselves (otherwise, why buy HBOS.?). So, these are empty shops...and who will buy them with the High Street suffering an oversupply of outlets and lack of customers - as many look to the Internet for bargains particularly of higher-priced goods (like TV's Computers, etc).
What surprises me is that Cars aren't supplied on the internet, with an offering of cars at prices to suit all. They could switch from Make to Make as a particular model offers good value and maybe reliability.
It might suit car-makers to have thei mid-model chosen, as this would increase production, reduce manufacturing prices....and let's face it Manufacturers don't care about their Dealers, - do they?

I'm not sure hangon. New car sales often offer quite small margins for dealers. They are often incentivised by manufacturers to sell a target number of units in return for a bonus. They also get a good cut from finance arrangements.Supplying of new parts has to be done by a main dealer and the margins on these are high far exceeding the cost of the car if bought individually. I see it as a symbiotic relationship

Lloyds Raises GBP8.5 Billion In Bond Exchange

LONDON -(Dow Jones)- Lloyds Banking Group PLC (LYG) Monday said it has raised GBP8.5 billion in new debt, most of which can convert to equity in times of stress, marking a major step in a GBP22.5 billion recapitalization that helps the U.K. bank move out from under the shadow of government support.

Later Monday, the bank is to price and set shareholder entitlement levels on a GBP13.5 billion rights issue.

Lloyds said the GBP8.5 billion of contingent core Tier 1 and core Tier 1 notes through its non-U.S. bond exchange offer, and said the U.S. exchange offer is already heavily over-subscribed.

As part of the move to strengthen its finances, the company earlier this month launched an offer to exchange some of its existing bonds for new enhanced capital notes, a type of bond, called contingent-capital securities, that convert to equity or equity-like instruments if a bank hits certain stress levels.

Lloyds said the non-U.S. offer attracted strong investor demand and the company had received offers to exchange GBP12.51 billion in existing securities.

The company said GBP6.99 billion of ECNs will be issued, while a further GBP1.48 billion will be issued in the form of new shares, additional ECNs and/or paid in cash on the late settlement date.

"We are pleased to announce that our non-U.S. Exchange Offer has been very positively received by investors and significantly oversubscribed," the company said, adding that "today's announcement represents an important milestone in our capital-raising exercise."

The second offer, which is a U.S. bond exchange offer, has already received over $2.7 billion of offers to exchange, even though the original maximum ECN available was only $800 million, Lloyds said Monday. The company will now increase this amount to $985.6 million and will announce the results of this offer Dec. 8.

The contingent-convertible bonds, or "CoCos," are designed to strengthen Lloyds' finances and are a crucial component of the 43.5%-government owned bank's plan to wriggle free of a government insurance program that would have added to its state aid bill.

The new form of securities are expected to be adopted by other banks looking for fresh capital, though analysts have mixed views on their appeal to investors.

Gary Jenkins, head of fixed-income research at Evolution Securities, said Monday that the success of the Lloyds' exchange doesn't necessarily mean CoCos will become "the next big thing."

"The real test would be if bond investors were prepared to invest in CoCos that were being issued as a new instrument in exchange for cash, rather than for existing impaired bonds," he said.

Lloyds and U.K. peer Royal Bank of Scotland Group PLC (RBS) were among many European banks that needed government bailout amid one of the worst financial crisis on record.

In exchange for the help they received, they now have to fulfill requirements from the European Commission, which wants to make sure aided banks aren't in competitive advantage to those that stayed independent.

Lloyds shareholders will vote on the capital-raising at an extraordinary general meeting in Birmingham on Thursday.

Surely what is really happening is that EU main countries are trying to take away UK financial income which aided by FSA they are in grave danger of doing.

Very confusing with the TERF. But everyone wants to speculate at what price the R I will be..........

Lloyds rights issue set for 60% discount
By Lee Wild ----Mon 23 Nov 2009

Lloyds Banking Group 90.60p +2.78%

LONDON (SHARECAST) - Lloyds Banking Group prices its 13.5bn rights issue, the biggest cash call in history, tomorrow and the maths suggest investors will be offered the shares somewhere between 33 and 37p.

The lender has said the final offer price will be either 15p, or a discount of between 38% and 42% to the theoretical ex-rights price (TERP), expected to be about 55p, whichever is the higher.

Its shares had traded as low as 83p after the bank announced its 22.5bn fundraising on 3 November, but theyve improved since, which will increase the rights price.

Investors liked the response to the part-nationalised lenders offer to swap existing debt for contingent capital, which encountered strong demand.

Offers to exchange 12.51bn of existing securities were received, of which 8.78bn have been accepted, said Lloyds today. Its issuing almost 7bn of enhanced capital notes (ECN), a new type of hybrid debt, plus a further 1.48bn of shares, cash or ECNs.

The company has also upped the maximum number of ECNs, or CoCos (contingent convertible core Tier 1 securities), it will issue as part of the US exchange offer from $800m to $986m.

The government is taking up its rights as part of the rights issue, investing 5.7bn net of an underwriting fee, to keep its stake in Lloyds at 43%.

Earlier this month, the UKs third-largest lender said it was raising 21bn from a 13.5bn rights issue and 7.5bn swap of existing debt for contingent capital.

The bond financing, later increased by 1.5bn due to high demand, counts towards core tier one capital and convert into equity in the event of a "stress scenario", such as Lloyds' core tier one ratio falling below 5%.

This massive fundraising exercise is all part of Lloyds plan to avoid being tied into the governments 260bn toxic asset protection scheme. Its already agreed to pay a 2.5bn break fee, having already received cover since the scheme was implemented earlier this year.

Shareholders will get their say later this week when Lloyds tries to convince them this is all a great idea.

A specially-convened meeting in Birmingham will house largely supportive institutional shareholders, although there are 2.8m private investors who may need a little more convincing.

Trading at 91.38p +3.20p

best of the day

Lloyds axes 800 jobs on Equitable contract loss

The latest cull at the bank, which is 43 per cent owned by the British taxpayer, comes at its offices in Aylesbury, Buckinghamshire, following the loss of a key contract with Equitable Life, the mutual life insurer.

The cuts, described by unions as a "body blow", come on top of a total 12,500 jobs already axed since the bank was created by the takeover of HBOS by Lloyds TBS in January and will be particularly felt in Aylesbury, where Lloyds is the biggest private sector employer.

i hope im in for a earner fellows bin sittin on 24000 of them for a year now

Rights Issue Price Announcement (Lloyds)

Lloyds Prices Rights Issue At 37p/Share To Raise GBP13.5 Billion





By Patricia Kowsmann
Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Lloyds Banking Group PLC (LYG) Tuesday priced the largest-ever rights issue at 37 a share, a 60% discount from Monday's closing price.

The U.K. bank will offer 1.34 rights share for every one existing share in an effort to raise GBP13.5 billion, it said in a statement.

The rights offer is part of a plan announced last month to raise GBP22.5 billion in fresh capital, including through the conversion of debt, as the bank tries to avoid an expensive insurance scheme that would otherwise see the government increasing its stake in Lloyds to over 60% from 43% currently.

The U.K. bank said the figure was at a 38.6% discount to the theoretical ex-rights price, the bottom of the 38% to 42% range previously given. TERP is the calculated price for shares after issue of new stock.

The offer is subject to shareholders approval Thursday in Birmingham.

The U.K. government said it will take up its part in the issue, which is also fully underwritten.

The new shares will represent 57% of Lloyds' share capital, the bank added.

-By Patricia Kowsmann, Dow Jones Newswires. Tel +44(0)207-842-9295, patricia.kowsmann@dowjones.com