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Lloyds bank gets the go-ahead from Alistair Darling

A nod and a wink from the Chancellor of the Exchequer Alistair Darling would appear to have given Lloyds bank the opportunity to raise significant funds from existing shareholders and escape the clutches of the government's toxic asset protection scheme. For some time the management of Lloyds bank have been looking to exit the scheme due to the massive premium required to protect "dangerous assets". So have they now found a way?



Initially there were suggestions that Lloyds bank was looking to raise around £15 billion to strengthen the balance sheet and escape the clutches of the government's insurance scheme but now it would appear this figure could be as high as £25 billion. There is no doubt that Lloyds bank still has some way to go to get anywhere near the level of business and reputation which it had prior to the acquisition of HBOS. Whether shareholders will swallow the reasons for a £25 billion rights issue (assuming this is the correct figure) remains to be seen but the company has been busy "sounding out" investors over the last few days.



A significant fundraising from Lloyds bank would move the focus back to the UK banking sector at a time when share prices were starting to move higher again.

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