UK banks set to unveil bailout plans
Monday, 13 October 2008
LONDON, Oct 12 (Reuters): Major British banks are likely to announce their plans to recapitalise early Monday, a person familiar with the matter said, a move which could see the government take multi-billion pound stakes in several lenders.
Banks are in talks with the government and regulators to determine how much capital each needs from 50 billion pounds ($86 billion) offered by Britain Wednesday.
An announcement is expected before market opens Monday, said the source who declined to be identified because of sensitivity of the matter.
The Sunday Times said Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays could ask for a combined 35 billion pound lifeline.
That could result in the government becoming the biggest shareholder-and even a majority investor-in RBS and HBOS. It could also force the departure of RBS Chief Executive Fred Goodwin, as shareholders have said he would need to go if the bank seeks to raise more cash.
The government could take seats on the boards of banks, a government source said Saturday.
Spokespeople for all four banks declined to comment and government officials were not immediately available.
British Finance Minister Alistair Darling, attending a Group of Seven (G7) finance ministers' meeting in Washington, said Saturday the government was to give more details early this week about its already announced 400 billion pound banking rescue plan.
The Sunday Times said the scale of the fund-raising could lead to trading at the London Stock Exchange being suspended to give the market time to digest the impact.
The LSE downplayed that prospect, however. "My information is that the market will open Monday," a spokesman said.
RBS, which has seen its market value fall to below 12 billion pounds, is to ask ministers to underwrite a 15 billion pound cash call, the Sunday Times said.
Banks are in talks with the government and regulators to determine how much capital each needs from 50 billion pounds ($86 billion) offered by Britain Wednesday.
An announcement is expected before market opens Monday, said the source who declined to be identified because of sensitivity of the matter.
The Sunday Times said Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays could ask for a combined 35 billion pound lifeline.
That could result in the government becoming the biggest shareholder-and even a majority investor-in RBS and HBOS. It could also force the departure of RBS Chief Executive Fred Goodwin, as shareholders have said he would need to go if the bank seeks to raise more cash.
The government could take seats on the boards of banks, a government source said Saturday.
Spokespeople for all four banks declined to comment and government officials were not immediately available.
British Finance Minister Alistair Darling, attending a Group of Seven (G7) finance ministers' meeting in Washington, said Saturday the government was to give more details early this week about its already announced 400 billion pound banking rescue plan.
The Sunday Times said the scale of the fund-raising could lead to trading at the London Stock Exchange being suspended to give the market time to digest the impact.
The LSE downplayed that prospect, however. "My information is that the market will open Monday," a spokesman said.
RBS, which has seen its market value fall to below 12 billion pounds, is to ask ministers to underwrite a 15 billion pound cash call, the Sunday Times said.