Lloyds bank mulls raising £15 bln
LONDON: Lloyds Banking Group's share price dropped here on Monday after reports said the state-controlled British lender planned raising 15 billion pounds (17.6 billion euros, 25 billion dollars).
Shortly after the start of trading, LBG's share price showed a loss of 3.82 percent to 98.1 pence on London's benchmark FTSE 100 index, which was down about half a percent.
Newspapers said LBG wanted to raise the amount by issuing new shares and in turn reduce the cost of insuring toxic debt with the British government, which has been forced into rescuing the bank amid the financial crisis.
Although LBG has agreed to put 260 billion pounds of troubled loans into the government's Asset Protection Scheme, it is now said to be concerned about the around 16 billion pounds in fees attached to its participation, The Times and Daily Telegraph newspapers reported on Monday.
"We are working with the Treasury to finalise the detailed terms of our intended participation in the asset protection scheme. We expect to conclude those discussions and agree terms that are in the best interests of our shareholders," a Lloyds spokesman was quoted as saying in The Times.
LBG last week announced a first-half net loss of 3.1 billion pounds, which compared with net profits of 1.95 billion pounds in the first six months of 2008.
The group blamed a staggering rise in bad debts that was largely fuelled by its takeover of rival bank HBOS earlier this year.
However investors had cheered the news because the loss was smaller than expected and the group added that impairment levels had probably peaked amid a deep recession in Britain.
The group also revealed that assets of HBOS -- which Lloyds bought in January in a government-brokered deal -- accounted for around 80 percent of the impairments. Lloyds is 43-percent owned by the government after its massive bailout.