From the iii.com articles

Lloyds poised to pay 100m in bonus tax
Allister Heath and David Hellier - 15.12.09 10:39

Lloyds Banking Group (LLOY), which yesterday successfully completed a record-breaking 13.5 billion rights issue, is preparing to pay out its bonus pool in full. The move, which follows mounting anger in the City over the government's super-tax, will see the firm having to hand over an estimated 100 million in payments to the Treasury as part of the 50% levy.

The payment of the bonuses, the bulk of which will be for amounts between 20,000 and 40,000, will surprise government ministers who expected most banks to rethink compensation policies in the light of the imposition of the bank bonus supertax in last week's pre-Budget report.

Lloyds' bonus pool is expected to reach between a quarter and a third of that of Royal Bank of Scotland (RBS). Only a very small number of its staff are in line for very large, 1 million-plus payouts.

But City AM has learnt that Lloyds, which is still 43%-owned by the government, is determined to bite the bullet and pay bonuses it feels its staff deserve even if that means taking a substantial hit.

Just as remarkably, most other banks in the City are now preparing to follow suit, according to sources that have been involved in discussions between the different institutions. This is especially likely to be the case at many US firms, which feel they cannot allow massive pay differences to arise between London and New York.

One of the main exceptions is likely to be RBS, which could reduce the amount it pays out as a result of the tax, partly because the government's stake in the firm is much higher than it is in Lloyds.

The government, which expected to raise around 550 million in total from the tax, is now likely to make far more than that, sources said yesterday. PricewaterhouseCoopers has already raised its estimate for the tax take to 2.5 billion.

But the news that it is set to cash in will be bittersweet to the Treasury, which has repeatedly said it wants financial institutions to pay staff less and retain more capital.

Lloyds' decision will be interpreted in the City as the latest sign that the bank is returning to rude health, having been brought low by its disastrous acquisition of HBOS.

Chief executive Eric Daniels, whose reputation in the City was at a low ebb last year, is increasingly being seen as one of the surprise winners from the credit crunch.

Many of those close to Lloyds now expect UKFI, the institution which holds the Lloyds shares on behalf of the government, to offload a significant portion of its shareholding in the first few months of 2010. The exact timing will depend on market conditions.

They argue that the government will be keen to show it has made a return on its investment before the election and consider a profitable exit price to be anything over 64p a share, compared to yesterday's closing price of 55p. Some banking analysts have a target price of 100p for the Lloyds share price, which, if correct, could see the government selling shares at a healthy profit.

Lloyds' estimates of the level at which a reprivatisation would be profitable is drastically different to what was being discussed just a few months ago.

In June this year, UKFI calculated that its break-even exit price was 122.6p per Lloyds share. But following implementation of Project Seaview - the nickname given by Lloyds insiders to yesterday's fundraising and exit from the asset protection scheme - and UKFI's take up of its rights, the government's break-even exit price will be reduced to 73.5p, Lloyds believes. This falls to 64p once all other payments are included.

The bank calculates the government has so far spent 20.3 billion on it. From that it subtracts the 144 million fees paid to the government for the underwriting of the rights issue, as well as the 2.5 billion break fee from the asset protection scheme, leaving a net outlay by the Treasury of 17.6 billion. This sum would be recouped if the government sells all of its shares at just 64p.

Banking sources believe that the government may use an unusual method to reprivatise all or part of Lloyds -?largely because the market would be unable to cope with huge numbers of shares put on sale all at once.

One option would be to access the convertible market through an equity-linked security with a debt component (either government debt or Lloyds debt) and a call option or warrant over UKFI's ordinary shares.

Alistair Darling was said last night to be adamant that he will not soften the 50% tax on bonuses, even as a growing number of banks and brokers threaten to move offshore.

to buy at 37 or not?
just cant see this going lower.(or maybe i can) i actually think i can, still cant bring mysellf to buy at 56sh
just watching
regards
jkd

Yep this is interesting from that article re- analysts......

Many of those close to Lloyds now expect UKFI, the institution which holds the Lloyds shares on behalf of the government, to offload a significant portion of its shareholding in the first few months of 2010. The exact timing will depend on market conditions.


They argue that the government will be keen to show it has made a return on its investment before the election and consider a profitable exit price to be anything over 64p a share, compared to yesterday's closing price of 55p. Some banking analysts have a target price of 100p for the Lloyds share price, which, if correct, could see the government selling shares at a healthy profit.


Lloyds' estimates of the level at which a reprivatisation would be profitable is drastically different to what was being discussed just a few months ago.


In June this year, UKFI calculated that its break-even exit price was 122.6p per Lloyds share. But following implementation of Project Seaview - the nickname given by Lloyds insiders to yesterday's fundraising and exit from the asset protection scheme - and UKFI's take up of its rights, the government's break-even exit price will be reduced to 73.5p, Lloyds believes. This falls to 64p once all other payments are included.

A good clean up of preference Shares yesterday ..........

16 December 2009 -- Repurchase and Cancellation of Preference Shares
As described in its previous announcement on 11 December 2009, Lloyds Banking
Group plc ("Lloyds Banking Group") has now settled the exchanges described
below. On 15 December 2009, Lloyds Banking Group repurchased for cancellation
(i) 301,900 preference shares (representing U.S.$301,900,000 in liquidation
preference) of its U.S.$750,000,000 6.413 per cent. Non-Cumulative Fixed to
Floating Rate Preference Shares (ISIN: GB00B3KSBH82) leaving 448,100 preference
shares (representing U.S.$448,100,000 in liquidation preference) outstanding;
(ii) 178,922 preference shares (representing U.S.$178,922,000 in liquidation
preference) of its U.S.$750,000,000 5.92 per cent. Non-Cumulative Fixed to
Floating Rate Preference Shares (ISIN: GB00B3KSBJ07) leaving 571,078 preference
shares (representing U.S.$571,078,000 in liquidation preference) outstanding;
(iii) 221,292 preference shares (representing U.S.$221,292,000 in liquidation
preference) of its U.S.$750,000,000 6.657 per cent. Non-Cumulative Fixed to
Floating Rate Preference Shares (ISIN: GB00B3KSBK12) leaving 528,708 preference
shares (representing U.S.$528,708,000 in liquidation preference) outstanding;
and (iv) 356,648 preference shares (representing U.S.$356,648,000 in liquidation
preference) of its U.S.$1,000,000,000 6.267 per cent. Non-Cumulative Fixed to
Floating Rate Preference Shares (ISIN: XS0460002693) leaving 643,352 preference
shares (representing U.S.$643,352,000 in liquidation preference) outstanding.

If is good for the housing market is good for Lloyds...........


The UK house building sector is now cheap having already discounted another dip in house prices next year, and share prices could therefore rise by around a third as the market recognises this, Citigroup has said.

According to the broker, the sector has been affected by what it called a 'disproportionate double dip discount', with shares having fallen 20% in the last three months on fears of an expected downturn in house prices in 2010.

But Citi analyst Aynsley Lammin has argued that underlying fundamentals have continued to improve in recent months, with house prices recovering some 8% from their April low, meaning the sector could withstand some deflation in prices next year anyway without having to mark down their assets once again.

Lammin added: 'Underlying fundamentals have continued to improve, as seen in house prices, mortgage applications, housing transactions and consumer confidence.'

Lammin said the whole sector was essentially cheap at current levels, adding that there could be 'scope for at least 30% upside, if not more, as the market re-rates the sector.'

good post Goldfinger - ty

RSI

What is happening to LLOY?

Seems to be heading down again.

LONDON (SHARECAST) - Weak miners and banking shares are leading Londons top stocks lower in early dealings on Thursday.

The central bank said interest rates would stay low for some time, although it upgraded its estimate for the US economy and will continue to rein back some its stimulus measures.

Someone is STUPIT enough ( Fred1new ) to see only LLOY down ..............

Banks - all down with the market

Darling: We will sell banks when we can make money on them
By Nicholas Paler | 17 December 2009

Chancellor Alistair Darling has said the government will make money on its investment in the UK's banking sector, adding it was in 'no hurry' to sell the stakes in the banks.

Facing a grilling on the Pre-Budget Report from cross-party MPs on the Treasury Select Committee, Darling said conditions in the banking system had stabilised, but he added the stakes in Royal Bank of Scotland and Lloyds Banking Group would not be sold before the time was right.

He said: 'We are in no hurry to sell the banks. I want to sell them when the time is right so we get the best possible deal.'

He added: 'In other words (we want to) get more money than we paid for them.'

Fielding questions about the country's sprawling debts Darling reiterated that it was the government's aim to 'get spending down', but he said the situation was currently too uncertain to do a detailed spending review.

Darling, who delivered the PBR last Wednesday, also said the City had a 'very good future' ahead of it, but he added banks needed to show 'restraint on bonuses'.

Explaining the UK's slow return to growth - it has lagged other major economies around the world and remains officially in recession at present - the chancellor pointed the finger at the reliance on the banking sector.

He said: 'We are slower coming out of the recession because of the size of the financial sector.'

Darling also warned unemployment would rise from here even though the economy is pulling out of recession. Yesterday the unemployment figure came in at 2.49 million people, less than had been expected.

RSI, The pocket size genius.

I thought from your earlier scribbles that LLOY was the star of the Banks.

Strange, some of my holdings are going up.

Will LLOY see 37 before or after XMAS?

I will watch. But RSI the little guru or ramper can carry on entertaining me.

re - Strange, some of my holdings are going up.

no one knows your holdings, you are MAD also talking to yourself.


re - I thought from your earlier scribbles that LLOY was the star of the Banks.

do not try to twist things to your way but putting words in my mouth STUPID


re - Will LLOY see 37 before or after XMAS?

Most likely we will see you buying "tabasco" caravan before that

Tufff decision Fred.a two berth Caravan in light green and creamor puke I believe the catalogue saidwith a number of very careful owners or an investment in LLOYs.I wouldnt want to call thatand Ive seen the Caravan!!!

I think there is a chance that it drops to 37p just purely because the market appears to be determined at the moment that the sp of every company that does a rights issue will drop to that or below that price. I've no idea why it takes that view but unless there is a change in sentiment soon we may all be able to buy in at 37p

DealerI have not got a Scooby what a good price for LLOYs isequallyneither has anyone elsefor that reasonI will remain out!

For once I agree with you. I've no idea where it is going so why throw my money away.

Snap..Ive always wanted to say that to a Dealer

some are shorting

17/12/09 15:38 UKREG Disclosure of Short Position-Lloyds Banking Gp PLC
17/12/09 15:37 UKREG Disclosure of Short Position-Lloyds Bank Gp PLC
17/12/09 15:32 UKREG Disclosure of Short Position-Lloyds Banking Gp PLC

Reason for the BANKS moving lower

market is well down
and Fed statement, banks need more margin cushion from 2012,

Masteris it not conceivablethe stock is a dodge pot?