any one got a feelling in their water how far LLoyds will go looking to to buy but just dont know when they are low enough

LONDON (Thomson Financial) - UK bank Lloyds TSB Group Plc. said it has signed up to a three-year agreement under which it will offer new mortgages to selected Northern Rock customers nearing the end of their fixed-rate deals.

Under the agreement, eligible Northern Rock customers will be offered a Lloyds loan and those who accept will be exempt from the lender's standard application fee.

Lloyds will apply its usual lending criteria, which include a maximum loan-to-value ratio of 80 percent, a spokesman for the bank said. Lloyds will also pay a commission fee to Northern Rock for each successful mortgage application.

Northern Rock, which has announced plans to shed one-third of its 6,000-strong workforce under a government-sponsored turnaround plan, said the agreement would safeguard about 100 jobs.

'We expect the new service to require around 100 existing staff who may otherwise have been at risk of redundancy,' the bank said.

Lloyds, the United Kingdom's fourth-biggest bank by market value, said the agreement would 'accelerate new business growth in a low risk manner while assisting Northern Rock towards its goal of reducing the size of its balance sheet'.

Northern Rock, once the UK's eighth-biggest bank, was nationalised earlier this year after the global credit crunch forced it to seek emergency funding from the Bank of England.

Northern Rock aims to repay a 25 billion pound Bank of England loan and reduce its portfolio of mortgage loans by half by 2011.

Lloyds shares were down 0.3 percent at 389-1/4 pence by 9:55 a.m., while the FTSE 100 share index was up 0.3 percent at 5989.2 points.

Gus comment: Looks like LLoyds will be able to cherry pick some of the more lower risk loans. I expect an adjustment to values will be made to take into account the weaker housing market when making assessments. Presumably NRK will be stuck with the no performing/riskier loans at the end of the day.

I agree, it looks a good deal for LLOY and part of the desire for NRK to get out of Mortgages. Just hope it's not one nice one, two, get a bad one three.

Does anyone think LLOY will have a rights issue, to bolster their coffers?

That is the only concern I have.
My holding is in loss presently.

I listen intently hangon and haven't heard any anayst say they might.

Barclays is the one being mentioned as a possibility.

Interesting article below from todays Telegraph, this is what I wanted to see with Lloyds.

See below.........

Lloyds TSB is considering launching a takeover bid for one of Germany's largest retail banks, underlining the British lender's relative immunity to the writedowns that have scarred the balance sheets of its international rivals.

Lloyds TSB is in the early stages of considering a move for Deutsche Postbank, valued by the German stock market at about 10bn (8bn), which has been earmarked for disposal.

If it decides to proceed with an offer, on which it would be advised by Lehman Brothers, Lloyds TSB would be embarking upon a significant change in strategy.

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The bank's focus has been on the domestic British retail and commercial banking sectors, but its limited exposure to the sub-prime mortgage and credit crises has, in the view of Lloyds TSB executives, given it a mandate to seek out international acquisitions.

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Deutsche Postbank, which is majority-owned by the logistics group Deutsche Post, has a wholly or partially owned network of nearly 11,000 branches. Other groups, including Germany's Allianz and Commerzbank, and Spain's Grupo Santander, which owns Abbey in Britain, are also examining offers.

Lloyds TSB declined to comment on its interest in Deutsche Postbank, but people close to the British group said Sir Victor Blank, its chairman, and Eric Daniels, its chief executive, are keen to look at a series of merger and takeover opportunities in continental Europe.

Bidders are also circling Citigroup's German retail banking operations, valued at about 5bn. Barclays is understood to have come close to lodging an offer for the division, but decided against this before initial bids were submitted, said sources close to the bank.

certainly good news from the point of view that lloy is looking to grow in this weaker market to drive a good deal. We will have to see how things pan out but we may well see a rights issue in order to make this expansion which would be better received than one to fill black holes in balance sheets. However, should boost the sp short term.

If LLOY is contemplating a bid for Deutshe Postbank that would be a reversal of their strategy of recent years to dispose of international businesses in South America and New Zealnd, it seems somewhat risky to buy into Europe when the euro is riding high and we are still faced with a possible global recession.imho

depends on what the deal will be. They dont have to buy. Lloy have consolidated well over lasted few years since they changed the management. They are a conservative lot. Best time to expand is when business is depressed as long as the price is right.

Best thing for LLOY to do just now is to ride out the credit crunch storm as it is still not over.imho

As long as the business fundermentals are sound, I would be happy for lloy to raise the money via a rights issue. Unfortunately the exchange rate is against sterling in many parts of the world apart from the US, but at some point lloy may take advantage of weak banking sector in the UK, but it would have to be at a very advantageous price due to the risks to the economy.

IS THIS THE BOTTOM.

can not see them wanting to expand much further in UK apart from taking advantage in cherry picking NRK business and such like. They have built up a good high wealth client business but, the outlook for UK generally is not inspiring. There is not a credit crunch if the business is of good quality. Call it a credit crunch if there is little or no security but this is what all the mess is about after all. It will take some time to sort out but the good old ways of doing business will return - they have to.

Outlook not good for unemployment which will impact on credit card business. However, lloy did sell of the lower end Marbles card business a couple of years ago and probably has relatively good quality accounts. imho

Not too sure how lloy stands on the compensation front re insurance protection policies.

How about their exposure to the property bubble with C & G ?

I guess that this exposure has been discounted in the sp, but it remains a concern if the UK economy performs worse than expected. I read somewhere that the C & G mortgage book has benefited from more conservative lending criteria than others, but not sure how true this is.

Don't think we are out of the woods yet, and would expect plenty more nasty news in the bank sector.

Still waiting to but lloy and rbs on weakness.

I agree spitfire so if you were on the LLOY board would you be contemplating a major acquisition never mind in euroland? Look what happened to the RBS sp after they bought ABN/AMRO. Does this story about Deutsche Postbank have any substance or is it just journos in search of a story?

todays sp tells the story, the City always anticipate what will happen.

would think the board would like to buy cheap assets, but why buy now when prices could weaken further.

I wonder if the real story is this -
"...We were prudent during the cheap-money period . . . . and we have cash waiting to buy into a European operation..."
- This would be a good way to spread the business and make them attractive to savers/businesses who regularly visit/do business in Euroland. All I know is they have interest in Cheltenham and Gloucester (for Mortgages) . . . and Scottish Widows (for life insurance)......but am unaware of direct European operation.

I thought the name Deutsche Postbank came from LLOY - not from journos creating a story.

I just wonder if LLOY won't then use this takeover as an excuse to ask shareholders for money....ah - - - who knows?

hangon on read post 32 source DTel.... no comment from LLOY...... does any bank want to manage 11000 branches in Germany? Sounds like a major headache to me!

You need to be a genius to forcast the bottom but in a large scale take over a reasonably low price is surely the best to be hoped for. The finacial crisis occurred in the middle of t/over battle with Barclays and RBS had time to amend their bid which would have been common sense but Fred didn't thus saddling the shareholders with execesive debt.

Lloyds long the butt of the market have plodded on with their old fashioned banking methods, bought 2 top line coys C&G, S/Widows. decided to concentrate on retail and sell unwanted, keep faith with share holders [divs] How very old fashioned, if they win Deutcher Post what will the market make of them then

Congatulations Mr Daniels, meantime friends where can I find some lolly to buy more.

2 questions

Anyone think they'll have ro raise money ?

Anyone think they will cut the divi ?

If the answer to both is no then with a 10% divi these are looking as cheap as chips.

I'm currently out of them but looking to buy back in again.

If they raise money I would think it would be to expand business in weak sector.

Divi could be cut if the UK market weakens further and house prices really start to fall, but even if they were cut 50% then 5% isn't bad.

I'm looking to make a small purchase soon, but still expect sp to fall further because of the exposure to the UK. My plan is to buy in small parcels, so that at the end of this downturn I should have a decent holding.

Godd Luck.............