Lloyds 'to consider rights issue'

10 August 2009

Lloyds Banking Group may consider a rights issue in order to reduce its reliance on the government's asset protection scheme, it has emerged.

According to a report in the Sunday Times, the bank is looking to raise up to $24.9 billion by offering new shares on the stock market.

Chief executive Eric Daniels is said to think that the fees associated with the government scheme - which total $26 billion - are too high.

"We are working with the Treasury to finalize the detailed terms of our intended participation in the asset protection scheme," a Lloyds spokesperson stated, adding that it will agree terms that are "in the best interests of our shareholders".

Lloyds - which is 43 per cent owned by the taxpayer - revealed a first-half loss of $6.76 billion last week.

It cited bad debts associated with the purchase of HBOS as a reason for the poor performance.

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