Nationalization of Lloyds of London

[marmar]

Lloyds Cedes Control to Government, Insures Assets (Update2)
By Andrew MacAskill and Jon Menon


March 7 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s biggest mortgage lender, will cede control to Prime Minister Gordon Brown’s government in return for state guarantees covering 260 billion pounds ($367 billion) of risky assets.

The government’s stake will rise to as much as 75 percent, making Lloyds the fourth U.K. bank to slip into state control since the run on Northern Rock Plc in September 2007. Brown is using that leverage to force banks to increase lending to homeowners and businesses and spur an economy that is facing its worst recession since World War II.

“In order to get British banks lending again the government needed to take them over,” said Simon Willis, an analyst at NCB Stockbrokers Ltd. in London, who has a “sell” rating on Lloyds stock. “It is likely to be at least three of four years before the banks return to the private sector.”

Lloyds will pay more for asset protection than Royal Bank of Scotland Plc, the first lender to enter the program, because of the deteriorating quality of loans acquired when it bought HBOS Plc in a government-brokered deal. London-based Lloyds will pay 15.6 billion pounds, or 5.2 percent of the insured assets, in the form of non-voting shares, the bank said in a statement. RBS last month paid 2 percent.

About 83 percent of the assets Lloyds is insuring came from HBOS, the bank said. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a6e...

[RUMMYisFROSTED]

1. Coming to a country near you.

[Warren Stupidity]

2. Well then, we are perhaps at 320 year flood levels.

Lloyd's started in 1688.

[muriel_volestrangler]

3. For clarification, "Lloyd's of London" (insurance) and "Lloyds Bank" are entirely separate

Lloyd's of London (founded 1688): http://www.lloyds.com/About_Us/History/Chronology.htm

Lloyds Bank (founded 1765): http://www.lloydstsb.com/about_ltsb/lloyds_bank.asp

It's just a coincidence of name. There's never been any connection between the 2. It's Lloyds Bank (which in includes what was the Halifax Building Society, once the largest mutual savings and loan in the world, the Trustee Savings Bank, a savings bank with a strange half-private/half-mutual history) and the Bank of Scotland (privately owned, but one of the issuers of sterling notes in Scotland)) that has now become majority-owned by the govnerment.