Lloyds to consider share issue for debts
Source: Agencies |
August 11, 2009, Tuesday
|
Print Edition
Print Edition
SHARES in the partly nationalized British bank Lloyds Plc dropped 5 percent in early trading yesterday on speculation the lender is considering a multibillion pound share issue as part of a plan to reduce its reliance on the government.
Lloyds agreed in March to put 260 billion pounds (US$433 billion) of bad loans into the government's asset protection scheme, an insurance program for toxic debt, but is now reported to be concerned about the 16 billion pounds worth of fees attached to the program.
Unveiling earnings last week, the bank said it expected its bad debts had peaked at the 13.4 billion pounds it reported for the first six months of the year, leading to speculation about whether it needs the asset protection program to the extent it initially envisioned.
The Sunday Times reported that Lloyds was considering raising 15 billion to 25 billion pounds to reduce the bank's exposure to the asset protection plan.
Lloyds declined to comment on the reports that it would raise capital.
The bank would need the approval of the government, which holds a 43 percent stake in the group, to go ahead with such a plan.
Lloyds agreed in March to put 260 billion pounds (US$433 billion) of bad loans into the government's asset protection scheme, an insurance program for toxic debt, but is now reported to be concerned about the 16 billion pounds worth of fees attached to the program.
Unveiling earnings last week, the bank said it expected its bad debts had peaked at the 13.4 billion pounds it reported for the first six months of the year, leading to speculation about whether it needs the asset protection program to the extent it initially envisioned.
The Sunday Times reported that Lloyds was considering raising 15 billion to 25 billion pounds to reduce the bank's exposure to the asset protection plan.
Lloyds declined to comment on the reports that it would raise capital.
The bank would need the approval of the government, which holds a 43 percent stake in the group, to go ahead with such a plan.
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