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Markets await report on Lloyds bank rights issue

The £13.5 billion rights issue from Lloyds bank closed on Friday and we should hear very soon whether it has been a success. As we mentioned in one of our earlier articles, there is speculation that over 90% of shares on offer have been taken up with the balance set to be distributed amongst the underwriters. So what does this mean for Lloyds bank?

The £13.5 billion rights issue is just one stage of a massive financial restriction of the company which will see over £20 billion of financial assets swapped, exchanged and sold over the next few weeks. The company has been pushed into this major reorganisation due to the blow the balance sheet has taken from the UK economic downturn and the disastrous acquisition of HBOS. There are hopes that the financial restraints will now be lifted after the massive fundraising and the company can at least start to look to the future rather than look to the past.

The UK banking sector, after an initial rally, has been struggling of late due to concerns regarding overseas events such as the Dubai debt saga and the issue of the Greek government which is struggling to repay its growing debt pile. These situations should be resolved over the next few months but there is no doubt there will be further surprises in the short to medium term.

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