Lloyds bank set to request a £5 billion injection from UK taxpayers
Despite rumours that Lloyds bank is in discussions to raise around £25 billion via a fundraising it would appear that the company has approached the UK government about a further £5 billion injection of UK taxpayer's money. At a time when you management of Lloyds bank had been attempting to cut ties with the UK government it appears that they have given up hope of escaping the government clutches and would rather perform a U-turn and seek government investment in the short term.
While there is no doubt at Lloyds bank itself would like to weaken ties with the UK government, it would appear that the regulators and the Bank of England are unsure about the financial strength of the company in the short to medium term. As a consequence, despite paying back £3 billion of UK taxpayer funding in the short term, the company is set to request a further £5 billion to shore up the balance sheet. It is also highly likely that we will see a number of asset disposals in the short to medium term with a requirement to increase cash flow and liquidity prior to any full-blown recovery in the UK economy.
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