No Lloyds nationalization, Treasury says
Posted on: Monday, 16 February 2009, 13:26 CST
The British government denied it was considering pumping more money into Lloyds Banking Group, which lost billions on a purchase of HBOS.
While leaving future options open, we are not contemplating (increasing investment) at the moment,
Treasury Minister Stephen Timms said.
I am confident that in the long term this is going to be a strong and successful commercial bank.
A bank spokesman called talk of nationalization, complete tosh,
The Daily Telegraph reported Monday.
Lloyds' shares dropped 20 percent Monday morning before staging a recovery -- the jolt taken after Lloyds said Friday that HBOS, the mortgage lender it acquired last fall, lost $15.6 billion last year.
Analysts said the bank would need to raise as much as $14 billion to stay afloat, the newspaper said.
If losses were to accelerate there is a risk capital could reduce to levels below which the market would have confidence in the group,
analyst John-Paul Crutchley at UBS told the Telegraph.
A UK Shareholders' Association said the Lloyds and HBOS merger has been an absolute disgrace.
Investors were furious
Lloyds had already spent half of the roughly $25 billion it had received in government assistance, the newspaper said.
Source: United Press International
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