Lloyds bank launches £13.5 billion rights issue
Today we have seen Lloyds bank launch a £13.5 billion rights issue which is roughly in the middle of market expectations. This is the first step in the next phase of the recovery process for Lloyds bank and will allow the company to buy itself out of the UK government's asset protection scheme and also inject further capital into the company's balance sheet. So what next for Lloyds bank?
The shares have reacted favourably this morning with a small rise which would appear to be as a consequence of the relief that the process is moving forward as opposed to hopes for the immediate future. The rights issue had been rumoured for a good couple of months now although due to wrangling behind the scenes between the UK government, Bank of England, regulators and Lloyds bank there has been a significant delay.
Even though Lloyds is taking positive steps to repair the balance sheet it was still need to dispose of a significant number of high street branches to receive the all clear from the EU Commission with regards to the state aid it received from the UK taxpayer. Progress has been made but there is still much more work to be done.
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