Can Lloyds bank really shake off the UK government?
The proposed £10 billion rights issue by Lloyds bank is perhaps one of the worst kept secrets in the city although there is some confusion today as to whether influential shareholders have been approached about their support. It looks as though Lloyds bank is prepared to do whatever it takes to shake off the UK government and ensure that the UK government shareholding does not increase over the 50% level. However, there is no doubt that Lloyds bank will need to have a very strong argument to attract the support of existing investors who have seen the value of their shares slashed over the last 18 months.
There has certainly been a significant change in the attitude of Lloyds bank directors over the last few weeks having been more than happy to allow the UK government to become more involved prior to this period. Many believe the new board of directors at Lloyds bank are looking to release the government installed straitjacket which would get ever tighter if its stake increased over 50%.
There is a definite danger of the bank being left behind if the likes of Barclays bank and others, untouched by the UK government, are allowed to spread their wings more freely. This would not benefit the UK government, UK taxpayers or Lloyds bank itself.
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