Lloyds Banking Group Is Looking For Compromise Over Asset Protection

The part nationalized Lloyds Banking Group is reportedly seeking a compromise deal with the British government that would see the state insure around 250 billion of toxic assets without increasing taxpayers' stake in the firm to more than 50%. Sources

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The part-nationalized Lloyds Banking Group is reportedly seeking a compromise deal with the British government that would see the state insure around 250 billion of toxic assets without increasing taxpayers’ stake in the firm to more than 50%.

Sources told the Guardian that ministers are keen on a deal that would increase public ownership in order to gain a greater degree of control over the bank.

However, LBG chief executive and the rest of the company’s board are “determined” to avoid any expansion of taxpayers’ shareholding or influence.

The newspaper said a number of options remain on the table, including the bank paying for the government underwriting its toxic assets with preference shares that cannot be converted into ordinary stock or, in the event of a conversion, a deal that would see the government sell the shares on the open market.

LBG said talks are “well advanced”, although it declined to comment on any details.

Royal Bank of Scotland has already insured around 325 billion worth of risky assets through the asset protection scheme.

D.C.

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