TIMES 20.5.09 n UK
European threat hangs over Lloyds' head
Helen Power and Tom Bawden
still faces the threat of action by Brussels under European state aid
rules.
The disclosure is likely to come in the prospectus for the bank's £4
billion fundraising, according to sources familiar with the document.
Lloyds intends to use the proceeds to repay preference shares issued
to the Government at the height of the banking crisis last October.
The Treasury is preparing formally to notify the European Commission
of the details of Britain's asset protection scheme, which must be
cleared by regulators to ensure compliance with European state aid
rules.
If the scheme is cleared, the Commission will then consider the deals
made between the Government and Lloyds and with Royal Bank of Scotland.
Finally, the regulator will decide whether the restructuring plans of
the two banks meet European Union legal requirements.
Brussels is considering the legality of banking bailout schemes from
most EU nations, but has not yet cleared any of them. [not much
sensde of urgency then ? -cs]
Lloyds declined to comment. It has, however, announced plans to cut a
further 625 jobs across the UK as it continues to integrate HBOS,
after last year's acquisition of its rival.
The latest redundancies will fall in the group's acquisition finance
and commercial banking units and come a month after Lloyds said that
it would cut 985 jobs from its car finance operation.
Further job losses are expected to be announced as Lloyds continues
to restructure its wholesale banking division, which includes these
units. Lloyds declined to comment on any further redundancies that
may occur from the restructuring.
The bank also announced yesterday that 300 new positions had been
created in its wholesale division, so that the net reduction in job
cuts totalled 325
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