(Lean times for banking fat cats)
Britain breaks up RBS, Lloyds in big bang for banking
AFP - Wednesday, November 4
LONDON (AFP) - – Britain is to force state-rescued banks RBS and Lloyds Banking Group to sell assets in a massive shake-up of the banking sector but will support them with 30 billion pounds, the government said on Tuesday.
The government expects new banks to be born as a result of the break-ups which are the result of pressure from EU competition authorities.
The parts being separated from the parent groups add up to about 10 percent of Britain's troubled retail banking market.
In return for more state aid, Lloyds and Royal Bank of Scotland (RBS) will have to cut bonuses paid to top staff and increase lending to recession-struck businesses and individuals.
Lloyds announced that it would launch a record 13.5-billion-pound rights issue. This represents the biggest-ever sale in Britain of new shares to existing shareholders.
Tuesday's announcement meanwhile comes one week after the European Commission approved the state aid in plans to break up and sell Britain's nationalised bank Northern Rock.
"Today will be the day that we see the beginning of the greatest changes in UK high street banking ever," said senior trader Manoj Ladwa at ETX Capital.
"The creation of three new banks, dramatic divestments from both Lloyds and in particularly RBS, mammoth fund raising for both banks including the British taxpayer dipping into their pocket."
Britain breaks up RBS, Lloyds in big bang for banking
AFP - Wednesday, November 4
LONDON (AFP) - – Britain is to force state-rescued banks RBS and Lloyds Banking Group to sell assets in a massive shake-up of the banking sector but will support them with 30 billion pounds, the government said on Tuesday.
The government expects new banks to be born as a result of the break-ups which are the result of pressure from EU competition authorities.
The parts being separated from the parent groups add up to about 10 percent of Britain's troubled retail banking market.
In return for more state aid, Lloyds and Royal Bank of Scotland (RBS) will have to cut bonuses paid to top staff and increase lending to recession-struck businesses and individuals.
Lloyds announced that it would launch a record 13.5-billion-pound rights issue. This represents the biggest-ever sale in Britain of new shares to existing shareholders.
Tuesday's announcement meanwhile comes one week after the European Commission approved the state aid in plans to break up and sell Britain's nationalised bank Northern Rock.
"Today will be the day that we see the beginning of the greatest changes in UK high street banking ever," said senior trader Manoj Ladwa at ETX Capital.
"The creation of three new banks, dramatic divestments from both Lloyds and in particularly RBS, mammoth fund raising for both banks including the British taxpayer dipping into their pocket."
