Bank shares plummeted today amid concerns that the latest government package to stabilise banks and encourage lending would not solve the deepening economic crisis.Royal Bank of Scotland was the biggest faller in the FTSE 100 share index, its price collapsing by more than 66%, to 11.6p, after it warned of the largest loss in British corporate history of up to £28bn and its chief executive, Stephen Hester, admitted that full-scale nationalisation of the bank had been considered.
The taxpayer already owns 58% of RBS but this will soon rise to 68% when £5bn of preference shares owned by the government are converted into ordinary shares.
The first day of dealing in shares of the newly created Lloyds Banking Group resulted in a 34% drop to 65p. The bank, which now has more branches than any of its rivals, issued a trading statement insisting that Lloyds TSB had been trading "satisfactorily", while HBOS, which it rescued in a deal brokered by Gordon Brown, had not suffered any "significant change" in its trading position.
Unlike RBS, Lloyds TSB is not asking the government to convert the preference shares it owns in the combined bank into ordinary shares, which means the taxpayers' stake is staying at 44%.
Eric Daniels, the chief executive of Lloyds, said the bank was "continuing its ongoing constructive dialogue" with the government about the wide range of measures announced today. Among them is a plan to sell insurance to banks to help them cap the losses on loans that have turned sour in the credit crunch.
HSBC, the only bank listed on the stockmarket not to have raised any fresh funds, insisted it would not need to use the government insurance scheme.
Looks like HSBC are getting a new customer, then. Meantime, the Gorgon's rescue plan has achieved, at unspeakable expense, the square root of fuck all.
A do-nothing party! My kingdom for a do-nothing party!
6 comments:
No; less than fuck all. Who's going to want shares in a bank that HMG has been briefing all weekend could be nationalised? Should be no surprise the shares fell like a stone. They would do even without the loss.
I may bank with the Co-op at this rate.
It's totally fuckwadded - today, tomorrow and for far too long.
Letter to the Bank.
Dear Sirs,
In view of what seems to be happening internationally with banks at
the moment, I was wondering if you could advise me correctly.
If one of my cheques is returned marked "insufficient funds," how do I
know whether that refers to me, or to you?
Respectfully,
I've been a lifelong HSBC customer and it gives me a rosy feeling to know that thus far my continued banking isn't reliant on the whim of Gordon.
Feel sorry for all those with accounts needing Government 'assistance', good heavens, you'll be shopping at the Co-op and joining a Union next!
Rhyming Slang was right.
The Penguin
I may bank with the Co-op at this rate.
Don't do that, they fund New Labour. So much for their ethical investments, eh?
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