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Lloyds and RBS to receive second $51bn bailout

November 4th, 2009

Before You Invest

Lloyds and RBS are set to receive more than $50 billion in new bailout funds in return for agreeing to cap bonus payouts.

Both banks will not pay cash bonuses for 2009 to staff earning more than $63,000 per year as part of the deal, which will see the UK Treasury pump a further $42 billion into RBS and another $34 billion into Lloyds.

The move will bring the government stake in RBS up to 84 per cent but Lloyds intends to escape state control with a rights issue that it hopes will bring in $22 billion.

It will also raise funds through $12 billion worth of exchange offers.

After a European Commission ruling both RBS and Lloyds are being forced to sell off some sections of their financial services operations.

RBS is to lose its bank branches and insurance division, while Lloyds must get rid of its Scottish bank branches and several other assets, including its online Intelligent Finance business.

Earlier this week, Lloyds made $383 million after it sold its Insight Investment Management company to Bank of New York Mellon.

Posted in Finance Fraud

Tags: Assets, Bailout, Bank Branches, Bank Of New York, Bank Of New York Mellon, Banks, Bonus, Cash Bonuses, European Commission, Finance Business, Financial Services, Government Stake, Insight, Insurance Division, Intelligent Finance, Investment Management Company, Lloyds, Rbs, Scottish Bank, Uk Treasury

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Tesco could buy Northern Rock

July 3rd, 2009

Before You Invest

The UK’s biggest supermarket group Tesco is interested in buying the nationalized bank Northern Rock, the Times has claimed.

Government ministers are keen to return the troubled lender to the private sector, preferably at a profit, before the next general election with an outright sale preferred to floatation because it will be quicker, the newspaper added.

In order to attract potential buyers, the Treasury plans to split the bank’s good and bad assets, with some of the most toxic assets likely to stay in public ownership. The Times said Northern Rock currently has deposits of £19.5 billion, with a mortgage book worth around £66.7 billion.

However, ministers may have to wait for the European Commission to clear any division of good and bad assets, as this may constitute an unacceptable level of state aid, the publication noted.

Other potential suitors are believed to include Sir Richard Branson’s Virgin Group and a number of private equity funds.

Northern Rock was nationalized in February 2008.