From The Times August 22, 2009

Lloyds could face 1bn bill as it eyes exit from protection schemeKatherine Griffiths, Banking Editor

Lloyds Banking Group may have to pay about 1 billion to the Government if it opts out of the taxpayer-funded insurance scheme for toxic assets. The payment would represent recognition that Lloyds has been stabilised by the Governments special asset protection scheme (APS), announced in February.

Lloyds, which is 43 per cent-owned by the taxpayer and which has been planning to place up to 260 billion of toxic assets into the APS, is thinking of walking away from the the scheme or cutting its participation. It no longer thinks that it needs the scheme because bad debts have peaked and the economy is improving.

If Lloyds does tear up the agreement, the Treasury is likely to insist on a fee recognising that the announ- cement of the APS provided crucial stability for the bank. The European Commission is also likely to say that Lloyds would have to pay a fee because the deal over the APS has been part of the state aid for the bank.

Lloyds is due to pay the Government almost 15.6 billion for using the APS, a sum that the bank and its shareholders believe is punitive.

Lloyds wants to keep the Governments stake as low as possible another reason for bypassing the APS. Under the existing agreement, Lloyds would pay for the scheme in new B shares issued to the Government, which would increase the States stake to 60 per cent, although the Governments voting rights would be capped at 43 per cent.

The bank is planning to pay the fee over seven years, making its annual cost slightly more than 2 billion. That could mean that the Government demands about 1 billion from Lloyds for the benefit it has felt over the first six months of the year.

Lloyds is still considering its options and many of its large shareholders are wary about walking away from the APS. They also do not want to support a rights issue for about 20 billion, the sum that analysts believe Lloyds would have to raise so that it would have enough capital to stay outside the APS.

The bank might be able to persuade shareholders to back a rights issue of about 10 billion, enabling it possibly to cut its use of the APS in half.

The Government would probably take up its own rights in a capital raising, it is thought, which would mean that institutional shareholders would have to provide only 6 billion. As well as getting shareholders on board, Lloyds would have to persuade the Financial Services Authority that it could pass the regulators stress tests without the APS. The FSA is likely to take a very conservative approach to making an assessment.

There is rising speculation that Lloyds is considering another option to issue some of the new B shares for the APS to institutional investors, rather than to the Government. This would allow the bank to keep state ownership at its lowest level. Investors would pay for the B shares, providing cash that Lloyds could use to pay a fee to the Government.

Adding a further layer of complexity, Lloyds is waiting to hear what measures the European Commission will insist it takes to mitigate the billions of pounds of state aid that it has received since the Governments bailout of banks last October. Among the expected remedies are forced sales of some of its assets, which might include Bank of Scotland or the Lloyds TSB franchise in Scotland.

The Government rushed out the APS scheme to stop the implosion of Lloyds and Royal Bank of Scotland (RBS), by promising that the taxpayer would pay for both banks losses beyond a certain point.

RBS, which is 70 per cent-state controlled, is putting in 325 billion of toxic debt. Both banks have signed agreements in principle.

Nar1

Is your memory faulting?

It must be, if repeating the the same -copy and paste - the same day

Resolution, Lloyds in talks over C. Medical -- Sun 23 Aug, 2009

LONDON (Reuters) - Entrepreneur Clive Cowdery's Resolution (RSL.L) has held early stage talks with Lloyds Banking Group (LLOY.L) over the sale of its Clerical Medical unit, the Mail on Sunday reported, citing an unnamed source.

Industry observers suggest the sale of Clerical Medical, which Lloyds acquired when it bought HBOS, could fetch up to 4 billion pounds, the paper said.

Lloyds and Resolution declined to comment.

Resolution, which raised 600 million pounds in a stock market listing last December to buy and restructure life insurers and asset managers, is the leading candidate to buy unwanted businesses from Lloyds.

-------------------------
HBOS was board's deal - Lloyds' chair -- Sun 23 Aug, 2009

LONDON (Reuters) - Victor Blank, outgoing chairman of Lloyds Banking Group (LLOY.L), said the bank's board was behind the decision to buy HBOS, not the UK government.

"There is a perception that the government was involved, but let me say very clearly: this was not Gordon Brown's deal," he said in an interview with the Sunday Times newspaper.

"It was the Lloyds board's deal, done with the right investigation, right process, right discussion -- and the board made a decision."

Lloyds agreed to buy HBOS in the depths of the banking crisis last September and weeks later was forced to surrender a 43 percent stake to the government in return for a 17 billion pound bailout. It posted a first-half loss, battered by bad debts from HBOS.

The paper also reported that incoming chairman Win Bischoff is facing pressure from some investors to clear out the boardroom.

A spokesman for Lloyds declined to comment on the report.

Bischoff is due to start as chairman on September 15.

TOP performer today, up to 108.50p at one time, now FTSE is taking a rest and the shares are at the moment 107.12 +5.54p

Naturally breaking the last high of 105p

------------------------------Intraday --------------------------------------------------- 3 month ------------------------

    

Anybody else see this hitting 2

maybe 3p but not 2

very good

when is the ceo going to tell holders the direction of the company the PR is piss pour. complete shite

are we about to get a RI AGAIN IN LLOYS that is now the latest

Awesome! Bought the last lot @ 38.5p and sold them at 98p. Keep 'em coming I say!

Lloyds cuts 200 jobs in general insurance

LONDON (Reuters) - Lloyds Banking Group, 43 percent owned by the government, will cut 200 jobs in its general insurance division by the end of January in a shake-up of back office functions, the bank said on Tuesday.

Lloyds, which agreed to buy rival HBOS last year, said it was combining the support operations of Lloyds TSB and HBOS General Insurance, including sales, marketing, actuarial and underwriting operations.

The bank said the jobs would be cut in locations including Wales and Yorkshire.

Analysts have estimated that over 30,000 jobs could be cut as Lloyds integrates HBOS.

Breaking new highs today now 111.50p +3.75p

How high are they going to go??????

They lost at this moment everything gain earlier and they are on the red now, but long term the market will say as the economy is recovering.

Money is safe here

I you you want a faster recovery stock then NTG is doing that now and I am in since yesterday, the debt problen is now solved after the placing.

------------------------------Intraday --------------------------------------------------- 12 month ------------------------

    

The way the gov has dealt with Lloyds is criminal .... 12% preference .... ? % for support over toxic debt .... can they realy be so stupid? with a sensible [fair] rate Lloyds would in double quick time buy back the 43% share holding, pay dividends and instead of being a liability gov would reap lots of luvly tax lolly while you and I fellow share holders would also contribute almost ungrudgingly.

It is at least possible the premium money might mostly be profit to gov!

ever hopeful tipton

Lloyds mulls alternatives to toxic asset scheme28-08-2009 06:52

Lloyds Banking is said to be considering alternatives to joining the government's toxic asset protection scheme (APS), including a potential rights issue or the sale of Scottish Widows.

The part-nationalised lender may also sell Clerical Medical, a provider of investment products and pensions, Bloomberg is quoting two people familiar with the talks as saying.

Lloyds, which is 43% owned by the UK government, has already tapped shareholders a number of times recently, but management is said to be concerned that the cost of taking part in the scheme is just too high.

The bank agreed to put 260bn of troubled loans into the APS scheme as part of its initial deal in March, but is baulking at the 15.6bn in fees. Talks about the details are still ongoing.

Is going places today over 4p to the good so far

------------------------------Intraday --------------------------------------------------- 3 month ------------------------

    

daniels must go the citywill not back a loser and he is a loser

Stopped out of the last % of long today (spread bet) but still hold some shares - although sadly not many. 25 MA breached on good volume - I'm going to leave this one for now as I'm not sure (enough) which direction from here.

Lloyds' shares set for falls, say experts
Tanya Powley -- 02.09.09

Lloyds Banking Group's (LLOY) share price could fall by 40% to 60p if the bank goes ahead with plans to raise 10 billion to reduce its dependence on the taxpayer, say industry experts today.

Reports suggest Lloyds has received the requisite support from some of its biggest backers in the City such as institutions and fund managers to raise 10 billion in order to make a partial withdrawal from the government's insurance scheme.

However, news service Reuters reported that Lloyds has not been actively seeking shareholder support.

Currently, this would cost the group a 15 billion fee to insure its 260 billion worth of toxic loans and also mean the government would increase its stake from 43% to 60%.

Chief executive Eric Daniels is said to be looking into an alternative that would see Lloyds insuring against just 130 billion worth of bad loans, therefore reducing the bank's fees.

Over the past year, Lloyds' shares have ranged from 33p to 298p. Shares in the group were down 5% this morning to 100.65p.

Market makers are predicting a spread of between 60p and 70p. One suggested Lloyds' target share price, if a rights issue went ahead, could be heavily discounted by as much as 40%, down to 60p.

"Lloyds has had a pretty good run on its shares recently. A rights issue would put pressure on the share price," he said.

David Buik, spokesman for BGC Partners, said he would prefer Lloyds to sell assets such as Cheltenham & Gloucester, Clerical Medical and Scottish Widows rather than go ahead with a rights issue.

This would downsize the balance sheet by a similar amount, he added.

"By selling these assets Lloyds could get at least 10 billion and that would be the job done. Private investors are already angry with what has happened with Lloyds. It has always been a boring bank until it got sucked into the deal with HBOS, which saw its share price plummet," he said.

A spokeswoman for Lloyds declined to comment.