UK government is set to take 43% of Lloyds HBOS
As we approach the end of the fundraising period for the Lloyds HBOS merged entity it has been revealed that the government is expected to end up with 43% of the enlarged group as both share prices are trading below their offer prices. This is likely to cost the UK government in excess of £17 billion and further tighten the government's grip on the UK financial sector. What next?
Once the funding arrangement has been completed there are hopes that the company will then be able to look forward to the future and offer a range of competitive financial instruments which are much needed by the economy. Whether the government will be able to force any real change from within is debatable because so far they have failed to do this despite a majority holding in the Royal Bank of Scotland.
The government now has total control of Northern Rock, total control of the Bradford & Bingley mortgage book, a majority stake in Royal Bank of Scotland as well as an expected 43% of the enlarged Lloyds/HBOS entity. The government has come under even more scrutiny than ever before due to the ownership arrangements surrounding these banks and the potential for abuse of market position.
Share this..
Related stories
If you don't ask you won't get!
While the UK financial sector has been in meltdown over the last 18 months there are signs of recovery in the property sector, credit cards and the mortgage market. However, even though we are seeing the injection of competition in these particular areas it appears that many UK consumers are still afraid to ask for the best deals. Remember, if you don't ask you won't get!
It is wort...
Housing affordability at "critical" point
The availability of affordable housing has reached a "critical" point, with the next generation of home buyers likely to need ten times their average salary to purchase a house unless action is taken, new research has warned.Growing demand for housing is increasingly pricing first-time buyers out of the market, a report from the newly-established National Housing and Planning Advice Unit (NHPAU) s...
Read MoreUK base rates to remain on hold
This week's meeting of the MPC is likely to keep UK base rates on hold as concerns about the UK economy continue to outweigh the potential problem of high inflation. Despite hopes that the rate of inflation in the UK would fall over the last couple of months it has remained stubbornly high with the Bank of England citing a number of one-off factors as the main reason for this. Many people expec...
Read MoreNorthern Rock staff receive 10% bonus as customers struggle
Government owned Northern Rock has today revealed that all staff will receive a 10% bonus this Friday in recognition of their dedication to the nationalised bank. The move has angered many in the city where the government has been attempting to pressurise UK banks into retaining as much cash as possible while at the same time rewarding Northern Rock staff after one of the most difficult years in t...
Read MoreSantander shows the way forward
Spanish financial giant Santander, the parent company of Abbey, Alliance & Leicester and Bradford & Bingley, has revealed earnings of £1.16 billion between July and September as the company looks to make money out of a difficult financial environment. The well timed acquisitions of Alliance & Leicester and Bradford & Bingley allowed the company to increase its exposure to the UK market at a time...
Read More