Sunday, 18 January 2009

Lloyds - the next state owned bank

Soon, the Government will own it all. From today's Telegraph:

The group, formed from the merger of HBOS and Lloyds TSB, is determined to resist the prospective approach from the Treasury despite the fact that it will mean a continued prohibition on paying dividends to investors and maintain the onerous interest bill triggered by the two banks' participation in last autumn's £37bn industry rescue package.

Lloyds, which will be Britain's biggest retail banking provider from tomorrow, is 43pc-owned by the taxpayer. The conversion of the preference shares would leave the Government with a majority stake in Lloyds, which the bank's executives believe would lead to greater influence over its lending activity

Lloyds management need to understand that resistance is futile. Their balance sheet is about to crumble as the economy slides further into recession, and debt defaults increase. The bank will soon belong to the taxpayer, who will then have to cover the losses.

Modern banking is all about excessive risk-taking, followed by failure, finishing up with state ownership.


Mitch said...

What does brown do when this fails, as it will and he cant borrow any more?
resign and emigrate? leaving us a 3rd world hell hole.

Mr Gonfalon said...

Remember that old headline: Will the last person to leave GB please turn out the lights?

Markbaldy said...

Yes Mitch, I agree - Blair and Brown have a lot to answer for don't they. The big difference is that Blair was either smart and knew exactly what he was doing or was just very lucky and got out just at the right time.
Brown on the other hand... well he will go down in history as a complete plonker... would anyone like to guess when he will resign ?

Mitch said...

If brown does resign the reason given will not be the truth it might be ill health either his or his kids but resign cos he is crap forget it.

Anonymous said...

Modern banking is all about excessive risk-taking, followed by failure, finishing up with state ownership.
You left out economic wasteland at the end. The welfare state is doomed.

Anonymous said...

I have a recurring nightmare of old ladies waking up to find they get no pension and their savings are all gone.
I hope communities are going to be able to pull together when it goes down.
Does anybody else think this will end in revolution?