Wants to break through 50p but still at 49.90p and needs to do it soon as the markets are UP and has to take advantage of that

Banks wave goodbye to woeful 2009 -- Rhian Nicholson -- 24.12.09

Bad debts, the bonus backlash and the iron fist of government intervention took a savage bite out of the banking sector last year as the credit crisis - and then its aftershocks - brought the threat of financial Armageddon a little too close for comfort.

All of the government's purchase of shares - together with offers of guarantees, insurance and loans made to banks - came with a hefty price tag of around 850 billion, according to the National Audit Office in December.

However, the auditor said that the Treasury had made the right decision to nationalise Northern Rock and take huge stakes in Lloyds Banking Group (LLOY) and Royal Bank of Scotland (RBS) - a view which did little to relieve shareholder anger over their heavy losses in recent times.

So here's a quick reminder of the few highs and many lows of the banking sector for 2009.

The New Year brought little relief from the carnage that was the last quarter of 2008. In January, HSBC (HSBA) shares plunged to seven-year lows after analysts warned that a cash call could be on the cards. Shares in Barclays (BARC) plunged to a 24-year low soon after amid concerns over its profit expectations while Royal Bank of Scotland lost 70% of its market value after it warned it is likely to post the biggest loss in UK corporate history.

The big-name banks then risked the ire of investors amid news they could be paying hundreds of millions of pounds in bonuses despite their precarious financial positions. This led the government to launch an enquiry into the bonus fiasco and impose restrictions on RBS and Lloyds bonuses.

However, there was worse to come. Lloyds Banking Group saw its shares go into freefall after it warned of 10 billion of pre-tax losses at HBOS in February. RBS then stunned the markets when it announced record annual losses of 24 billion.

By the end of February, the government was attempting to clear up the worst of the mess with its asset protection scheme - an insurance programme for the banks' riskiest assets. However, HSBC it launched a record 12.5 billion cash call as it revealed a 62% plunge in pre-tax profit for 2008.

Just as a semblance of calm was settling over the sector, the political fireball that was Sir Fred Goodwin's pensions came blazing onto the scene. His initial defiance was gradually eroded by the public outcry that followed, leaving him with (just) 342,500 a year.

First quarter figures from Lloyds and RBS sent another shiver through the markets as investors tried to second guess just how many more bad debts are likely to come out of the closet. Barclays and HSBC, in contrast, were proving sprightly following a strong performance from their investment banking divisions.

It wasn't long before the need for cash resurfaced with Lloyds reaching out to shareholders for 4 billion in June - and 87% of them snapping up new shares. Barclays also ran into a summer storm after its Abu Dhabi investors announced they are selling off part of their stake they acquired in October 2008. In June, the bank then shored up its own balance sheet with the 8.2 billion sale of Barclays Global Investors to BlackRock.

The bad times were, however, far from over. In August, first-half results showed the sector was far from on the mend with bad debts taking a hefty bite out of profits and arguably the most stable bank of the bunch, Standard Chartered (STAN), stunned the markets with a 1 billion fundraising.

Then the divestments started. Lloyds flogged part of its part of its private client fund management business to Rathbone Brothers in a deal worth up to 35.4 million. In return for its state aid the part-nationalised bank was forced to sell off a fifth of its UK branch network including the TSB branches in England, Wales and Scotland and mortgage broker Cheltenham & Gloucester. Its Intelligent Finance online business will also be going to a new home.

Additionally, it announced the UK's biggest ever rights issue at 13.5 billion - which received a 95% take-up - and a 9 billion debt swap as it sought to avoid participating in the government's asset protection scheme.

RBS was also bowed to the might of the EU Commission in return for its 53.5 billion of state aid. It is selling off 318 branches in the UK - equating to 14% of its branch network in return for state aid and its participation in the government's asset protection scheme.

This will include its RBS branch network in England and Wales - originally Williams & Glyn's -and its NatWest brand in Scotland.

The bank, which is 84% owned by the taxpayer, will also offload its card payment business RBS Insurance and Global Merchant Services and its stake in commodities trader RBS Sempra Commodities.

The Commission also cleared RBS' participation in the APS, in which it will insure 282 billion of toxic assets. Around 168 billion of these loans originated overseas with around 75 billion in continental Europe relating largely to RBS' disastrous acquisition of ABN Amro.

And the story is far from sorted. The government has said that taxpayers are sitting on potential losses of up to 50 billion - depending on future losses from the 282 billion of toxic assets that RBS is planning to insure and the amount it can get for selling its stakes in Lloyds.

Sadly there was no happy ending for shareholders in the Northern Rock saga. In January, around 150,000 Northern Rock private investors along with hedge funds SRM Global and RAB Capital started their fight for compensation in the High Court - a battle which they subsequently lost and ended up heavily out of pocket.

In December, Rock shareholders were told the bitter news that they are not entitled to receive compensation following the nationalisation of the troubled lender two years ago.

Independent valuer Andrew Caldwell, who was appointed by the government 14 months ago, concluded that there was "no value in the share or rights as at the valuation date and therefore no compensation is payable".

It was, by all accounts, a trying year for investors. While the going started to get a little easier towards the end of the year and the worst is hopefully over, the financial sector is far from out of the woods. Next year will be an interesting - and hopefully more prosperous - one.

Has move over 50p to 50.05p+0.78p

will see for how long it will last, anyhow the best of the bank bunch

Itau may buy stakes in RBS, Lloyds
Mon Jan 4, 2010 5:14am GMT

SAO PAULO (Reuters) - Brazilian lender Itau Unibanco (ITUB4.SA)(ITUB.N) is considering buying stakes in one of the British banks rescued by the U.K. government during the global credit crisis of 2008, the Sunday Times said on Sunday.

Sao Paulo-based Itau Unibanco, the largest non-government lender in Brazil, may bid for stakes in Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L) as the British government sells off its stakes, the paper said, citing Pedro Malan, Itau Unibanco's chairman of its international advisory board.

A spokesman for the bank said in a phone interview from Sao Paulo that the information in the report, on the whole, was not true. The spokesman declined to give any information about how or when Malan was approached.

Itau Unibanco, the byproduct of Brazil's largest financial industry combination, is also examining deals in a number of other countries, including the United States, Malan, a former Brazilian finance minister, told the newspaper.

"We're looking. Of course we're looking," he told the newspaper. "But we're not in a hurry. We think we have time."

Any investment plans in the U.K.'s financial industry will be "refined" throughout 2010, Malan told the Sunday Times, adding that, aside from the uncertainty in the global economy, this will be an election year in Brazil.

The British government said in early November that it was to pump over about $50 billion into RBS and Lloyds.

At the time, the government was sitting on a paper loss of over 10 billion pounds ($16.2 billion) on its 37 billion pound rescue deal in October 2008.

Currently, and including the November capitalisation, British taxpayers hold an 84 percent stake in RBS and own about 43 percent of Lloyds.

You forgot to mention he price per share paid by the taxpayers.
We have over 20% to run on these two.

just touched 54.70p - going north !

Banks are on a good mood today and that has inspirer the FTSE higher at the moment after opening lower

Is there a safer, better, secure, promising share on the market than LLOYDS Group?
I dont think so - its no no brainer with no downside as far as I can see.

How many times have a I read similar comments!!!!!

!!!!!!!

How many times have we read similar post like yours?

It is just comments, but you could just stayed in bed nursing your cold instead of trying to pass it to the rest of the posters

Told you fred!!

         JOKE OF THE DAY

Sheep shagging carry on

A researcher is conducting a survey into sheep shagging.
First of all he visits a Cornish farmer.

"So, Cornish farmer, how do you shag your sheep?"
"Well, I take the hind legs of the sheep and put them
down my wellie boot and take the front legs of the
sheep and put them over a wall."

"That's very interesting," replies the researcher and he
leaves the Cornish farmer. Then he meets a Midlands Farmer.

"So, Midlands farmer, how do you shag your sheep?"
"Well, I take the hind legs of the sheep and put them
down my wellie boots and take the front legs of the
sheep and put them over a wall."

"That's very interesting," replies the researcher.
"That's how they do it in Cornwall too."
And he leaves the Midlands farmer.
Then he meets a farmer from Abergaveny.

"So, Abergaveny farmer, how do you shag your sheep?"
"Well, I take the hind legs of the sheep and put them
down my wellie boots and take the front legs of the
sheep and put them over my shoulders."

"Over your shoulders?" replies the researcher.
"Don't you put them over a wall like everyone else?"

"What?" says the farmer. "And miss out on all the kissing?!"

Ten shares tipped to take off in 2010

Here are 10 winning shares for the year ahead, as chosen by our writers
Published: 1:33PM GMT 04 Jan 2010

LLOYDS BANKING GROUP 50.69p

year was another utterly miserable time for shares in Lloyds Banking Group, which has plunged nearly 60pc over the past 12 months. However, it now looks oversold.

The market has treated both Lloyds and its partner in misery, Royal Bank of Scotland, as two millstones around the neck of the FTSE. For the past 18 months that's been the correct call but not anymore.

Lloyds and RBS or more particularly their poisonous acquisitions, HBOS and ABN Amro respectively have terrified investors with the constant threat of more toxic discharges. This fear of the unknown no longer applies to Lloyds.

Against the odds, the bank has pulled off a 13.5bn rights issue. The record-breaking issue attracted 92pc non-governmental support. But if investor confidence won't sway the market, the implied Government and regulatory conviction should.

There is no way the Treasury nor the Financial Services Authority would allow Lloyds to escape the asset protection scheme and launch a rights issue if there was even a remote chance it could unleash more bile into the market or if the regulatory labyrinth could rock the bank again. The hard analysis has been done: Lloyds must be the most vetted bank in the world, and for that reason it's a buy.

LAST YEAR I warned that Barclays was a risk, but one that was worth taking. The high street bank had come through the autumn carnage, bruised and battered but still independent. My bet was that banking institutions are vital and the strongest of a weak bunch would lead the recovery. This seemed over-optimistic as Barclays plunged to just 51p within weeks. But at this level the market knew it had over-reacted and Barclays soared up to 390p in September. The shares have come off again to 276p but are still up 76pc.

Ten shares tipped to take off in 2010

Lloyds out performing ftse on the 5 day, and even slightly out doing Barclays:

By WSJ Staff
Deutsche Bank still sees Barclays and Lloyds Banking Group as attractive credit-risk recovery plays and has them as top picks for 10 along with Credit Suisse and Santander.

Deutsche analysts say that during 09, recovery was the driving theme of the outperformance in the European banks sector but only a small number of banks, including Lloyds and Barclays, are still capable of boosting profits on this theme.

Deutsche thinks Royal Bank of Scotland also looks attractive on normalized earnings but sees it at risk from the new Basel rules and government intervention. Therefore Deutsche excludes RBS from its top picks. Deutsche Rates all the shares at buy.

The global economic rebound is likely to be even stronger than many have anticipated and developed markets have the potential to outperform emerging markets, Jim O'Neill, head of global economic research at Goldman Sachs, told CNBC Tuesday.

"I think what we've seen since the turn of the year is actually really strong," O'Neill told "Worldwide Exchange."

South Korea's economic data is "on fire," and so is China's purchasing managers index, O'Neill said.

Goldman Sachs analysts estimate that the world economic growth will be 4.4 percent this year and 4.5 percent in 2011.

Above 55p - still going north, and against the market trend ! Further house price growth continues into Dec. Good news for the UK's largest mortgage provider.

SMARTY - No brainer - the only way is up - this must be the most scritinised bank in the world no more bad debt surprises safe as houses!!!!!!1

And just how safe are houses? :-))))

Also Lloyds being one of the 2010 Olympic games in L=ondon, how can the PR men let this one fail !