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| Version 2 | Version 3 |
|---|---|
| Lloyds shares rise on Blank news | Lloyds shares rise on Blank news |
| (about 2 hours later) | |
| Shares in Lloyds Banking Group have risen following chairman Sir Victor Blank's announcement he would be stepping down by June next year. | Shares in Lloyds Banking Group have risen following chairman Sir Victor Blank's announcement he would be stepping down by June next year. |
| Lloyds shares were up 5.9% to 94.5 pence in mid-afternoon trading. | |
| Sir Victor has been chairman of Lloyds since 2006 but has faced criticism for the decision to buy HBOS last year. | Sir Victor has been chairman of Lloyds since 2006 but has faced criticism for the decision to buy HBOS last year. |
| Separately, Lloyds said investors would be able to buy up to £4bn of shares from 20 May to replace preference shares held by the Treasury. | Separately, Lloyds said investors would be able to buy up to £4bn of shares from 20 May to replace preference shares held by the Treasury. |
| SHARE DIFFERENCES Ordinary shares: Give you voting rights at general meetings, and pay a variable dividend depending on profitsPreference shares: Give you no voting rights, but pay a fixed dividend irrespective of profits Financial jargon explained Check Lloyds Banking Group shares | SHARE DIFFERENCES Ordinary shares: Give you voting rights at general meetings, and pay a variable dividend depending on profitsPreference shares: Give you no voting rights, but pay a fixed dividend irrespective of profits Financial jargon explained Check Lloyds Banking Group shares |
| Lloyds announced the cash-raising plan in March. | Lloyds announced the cash-raising plan in March. |
| The share offer is underwritten by the Treasury so if shareholders do not take up any shares, they will be bought by the Treasury. | The share offer is underwritten by the Treasury so if shareholders do not take up any shares, they will be bought by the Treasury. |
| That would increase the stake in the bank owned by UK taxpayers from 43% to about 65%. | That would increase the stake in the bank owned by UK taxpayers from 43% to about 65%. |
| HBOS criticism | HBOS criticism |
| Sir Victor announced on Sunday that he would retire next year, saying it was "the right time for the Group to appoint a new chairman". | Sir Victor announced on Sunday that he would retire next year, saying it was "the right time for the Group to appoint a new chairman". |
| Lloyds' takeover of HBOS was approved by a court in Edinburgh in January, with the government waiving competition concerns. | Lloyds' takeover of HBOS was approved by a court in Edinburgh in January, with the government waiving competition concerns. |
| At the time, Lloyds chief executive Eric Daniels said the combined group would have "a strong financial position". | At the time, Lloyds chief executive Eric Daniels said the combined group would have "a strong financial position". |
| But in February Lloyds said that HBOS had made a loss of £10.8bn in 2008. | But in February Lloyds said that HBOS had made a loss of £10.8bn in 2008. |
| There will come a moment when [Lloyds] has absorbed all the losses generated by imprudent loans and investments made in the bubble years [at HBOS] Robert Peston, BBC business editor Read Robert's blog | There will come a moment when [Lloyds] has absorbed all the losses generated by imprudent loans and investments made in the bubble years [at HBOS] Robert Peston, BBC business editor Read Robert's blog |
| Sir Victor and Mr Daniels have both come under fire for taking on HBOS. | Sir Victor and Mr Daniels have both come under fire for taking on HBOS. |
| "He is certainly culpable for what's happened at Lloyds but he's by no means individually or solely responsible for what's taken place at the merged group," Euan Stirling, investment director at Standard Life Investments, told the BBC. | "He is certainly culpable for what's happened at Lloyds but he's by no means individually or solely responsible for what's taken place at the merged group," Euan Stirling, investment director at Standard Life Investments, told the BBC. |
| Standard Life Investments is an institutional shareholder in Lloyds Banking Group. | Standard Life Investments is an institutional shareholder in Lloyds Banking Group. |
| "[Lloyds] did take on a very, very risky loan book in HBOS. I think this is going to turn out to be the worst loan portfolio in the history of UK banking," Mr Stirling added. | "[Lloyds] did take on a very, very risky loan book in HBOS. I think this is going to turn out to be the worst loan portfolio in the history of UK banking," Mr Stirling added. |
| However the BBC's business editor Robert Peston says at some point Lloyds will have absorbed all of HBOS's losses and will be "a gargantuan collector of our earnings and savings". | However the BBC's business editor Robert Peston says at some point Lloyds will have absorbed all of HBOS's losses and will be "a gargantuan collector of our earnings and savings". |
| The decision to buy HBOS therefore may not look so bad in two or three years, he says. | The decision to buy HBOS therefore may not look so bad in two or three years, he says. |
| Discount shares | Discount shares |
| Lloyds has 2.8m private investors. | Lloyds has 2.8m private investors. |
| They are being offered 0.6213 shares at 38.43 pence for each share owned. | They are being offered 0.6213 shares at 38.43 pence for each share owned. |
| That is a discount of 56.9% on Friday's closing price of 89.2p. | That is a discount of 56.9% on Friday's closing price of 89.2p. |
| Lloyds said the average private shareholder has about 550 shares. They would be able to buy 340 new shares for £130. | Lloyds said the average private shareholder has about 550 shares. They would be able to buy 340 new shares for £130. |
| Previous attempts by banks to raise cash via share offers have been snubbed by investors because the offer price has been above the market value. | Previous attempts by banks to raise cash via share offers have been snubbed by investors because the offer price has been above the market value. |
| Last year RBS sought to raise £12bn, but only 0.24% of the new shares on offer were taken up by shareholders. | Last year RBS sought to raise £12bn, but only 0.24% of the new shares on offer were taken up by shareholders. |
| The offer price of 65.5p was about 10p higher than the price at which the shares were trading. | The offer price of 65.5p was about 10p higher than the price at which the shares were trading. |