Lloyds bank returns £2.3 billion to the Treasury
In a bizarre turn around, the £4 billion fund raising which has just been completed by Lloyds bank will see around £2.3 billion returned to the Treasury as part payment against funds used to keep the business afloat. The taxpayer spent £1.7 billion acquiring new shares in the recent rights issue and these will remain in government hands until the 43% stake in sold, which many expect to be in 2010.
The UK government also exchanged a number of convertible shares into ordinary shares, saving Lloyds bank around £480 million year in interest payments. While it may seem somewhat bizarre for the UK Treasury to be injecting £1.7 billion into acquiring new shares while at the same time receiving £2.3 billion from Lloyds bank this will in due course free up the Lloyds Banks balance sheet and assist with the rebuilding of the company.
There is no doubt that the HBOS merger has significantly impacted upon the reputation and the financial strength of Lloyds bank and while the UK government was known to be behind the merger there appears to be little in the way of good will towards the directors of Lloyds bank. Indeed chairman Victor Blank received a hot reception at this week's shareholders meeting where he was heckled and asked to stand down.
Share this..
Related stories
Where has all the eco-friendly tax income gone?
As the G8 summit in Italy continues to grab the headlines for all of the wrong reasons it seems that the billions upon billions of pounds of eco-friendly taxes collected by the likes of the UK government have apparently disappeared with no visible impact on the environment.
Amid more and more hot air rising from the G8 summit, where the likes of Barack Obama and Gordon Brown are pre...
Youngsters turn to their parents for financial help
Carrying on the age-old "bank of mum and dad" it has been revealed that more and more young adults are turning to their parents for financial help. Whether falling behind with their mortgage, overdue on their credit cards or struggling to repay their overdrafts it appears many parents are having to dig deep into their own savings to make life easier for their children.
While cynics...
Do the Bank of England know something we don't?
Last week's revelation that Mervyn King, Gov of the Bank of England, is prepared to inject yet more funds into the UK government's quantitative easing program caught many analysts by surprise. At a time when the UK economy appears to be turning a corner it is Mervyn King who has all of a sudden turned very negative on the UK economy. So does the Bank of England know something we don't?
Is Alistair Darling considering a VAT cut for home improvements?
The Scottish Building Federation is today at the centre of an intriguing scheme which could see VAT on home improvements cut to around 5%. Alistair Darling has been hit with a number of potential schemes in the run-up to the next budget on 22 April, with the Scottish Building Federation believing a reduction in VAT on home improvements would lead to a further £80 million a year boost to the secto...
Read MoreISA ‘best buy’ Interest Rate drops below 3%
Another blow has been dealt to UK savers as the ISA interest rate has fallen below 3pc for the first time since the accounts were launched in 1999. Coventry Building Society dropped their interest rate from 3.1pc to 2.8pc, meaning there are now no ISA’s on the market that will pay over the 3pc mark in interest. This comes at a time when people are being constantly urged to try and save, while...
Read More