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Lloyds Bank raises £800 million in share placing

In a move which smacks of opportunism it has been revealed that Lloyds Bank has placed around 284 million new shares with institutional investors raising an impressive £800 million in just 3 hours. However, the group has been stung by suggestions that the sudden bounce in banking shares last week has given the group a very small window in which to raise the funds with the long term scenario in the banking sector still very difficult to predict.

The rather bizarre thing is that many in the market are suggesting that it is the hedge funds, many of who where short of Lloyds Bank shares last week, which have been forced to subscribe to the offer and buy many of the new tranche. These are the funds which have been banned from taking out new short positions in the financial sector by new regulations announced last week.

Lloyds Bank seems as though it will have a real task pushing through the HBOS merger n the short term with many politicians and shareholder associations now becoming involved. While ultimately it seems as though the bid will sail through - because basically there is no alternative for HBOS - it may take a little long than initially expected although Lloyds Bank will be support HBOS financially while the paperwork is completed.

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