Will the Lloyds bank rights issue be successful?
The Lloyds bank rights issue will close today at 11 AM with shareholders having to decide whether they want to take up their entitlement to new shares. Dealers believe that around 90% of shareholders have decided to take up their additional shares although in many ways, with the rights issue being underwritten by institutions and the government, there was never any real danger of Lloyds bank not receiving the £13.5 billion in question.
A number of brokers have turned positive on Lloyds bank shares over the last few days after a difficult period for the UK banking sector and Lloyds bank shares in particular. It will be interesting to see the exact take-up figure, probably sometime next week, and the impact which this could have on the share price in the short term. However, before we all get carried away, there is still significant work to do with regards to rebuilding the Lloyds bank balance sheet and reorganising the business to be as competitive and as streamlined as possible for the future.
While the £13.5 billion rights issue is obviously a vital element of the recovery process there are still many challenges ahead for the Lloyds bank board of directors and the UK banking sector as a whole. It will take some time to repair the battered balance sheets and battered reputations of those in the UK financial sector but hopefully the closure of the Lloyds bank rights issue will be seen as a major step forward, in particular for Lloyds bank itself.
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