Lloyds and RBS 'won't be further nationalised'

 
Signs outside Lloyds TSB and RBS branches

Lloyds has said that following discussions with the banking regulator, the Prudential Regulation Authority, it does not need to sell new shares to boost its capital resources and enhance its ability to absorb future losses.

Later today, Royal Bank of Scotland is expected to say something broadly similar.

This will be a great relief to their shareholders, especially their biggest shareholder, the Treasury.

Because if these two had been forced to issue new equity, to sell new shares, that money might well have had to come from the state, from taxpayers.

And further nationalisation of these vast banks was the last thing on the wish-list of the Chancellor, George Osborne.

So today's announcements - which are the culmination of talks with the regulator initiated when the Bank of England ruled earlier this year that UK banks collectively needed to find £25bn of additional capital by the end of this year - represent a further milestone on the tortuous path to privatisation.

That said, both are committed to strengthening themselves by continuing to sell non-essential assets.

So we don't yet know the precise shape of what will be eventually sold back to the stock market, as and when Lloyds and RBS are privatised.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    0

    Comment number 144.

    2.Actionr
    22nd May 2013 - 9:48
    Do they have so many non-essential assets of value? It feels that the whole UK banking sector is built like a house of cards.
    ===
    Your feeling is correct - it is. But be careful not to tell anyone.

  • rate this
    +1

    Comment number 143.

    Privatisation:

    The act of selling an asset we already own, back to us for a large profit.

    Gas, Water, Electricity, Telecoms, Roads and now Schools & NHS

  • rate this
    0

    Comment number 142.

    First of all, the economy has to serve the people and not vice versa. Therefore, banks have to refrain from all actions that do not serve this purpose.

  • rate this
    -1

    Comment number 141.

    Nationalisation is a violation of the individual's property rights, but unfortunately very few people actually respect such rights.

    Personally I have no respect for anyone who advocates the violation of the property rights of others; they're all fundamentally immoral people who are cheering on tyranny, and are happy so long as "someone else" is having their property rights violated. You're next!

  • rate this
    -1

    Comment number 140.

    THE IMF will today (May 21st) TELL GOVT it's time to sell its stakes in Lloyds & RBS. Report into UK economy will urge Treasury to speed ups disposal. Lloyds’ share price has recently surpassed value it was bought at, though RBS’s remains below.
    So, as you say, this tells us nothing about "shape" of what will be sold back to the stock market, or when privatization will actually occur.

 

Comments 5 of 144

 

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