Lloyds Banking share price could scupper offer |
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| Finance | |
| Written by Roberta Murray | |
| Thursday, 29 October 2009 | |
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Lloyds Banking Group may have to take another look at its planned capital raising, while the CBI welcomes Northern Rock split. Lloyds Banking Group (LON:LLOY) may have to rethink its planned rights offer in light of its falling share price. While the share price is up sharply this morning the Telegraph reports that there are fears that Lloyds Banking's, "crumbling share price has thrown the planned £11bn rights issue into jeopardy."The bank is expected to begin sounding out investors about launching a £25bn capital raising to withdraw from the state insurance scheme for its toxic debts. Meanwhile the CBI has reacted to the decision by the European Commission to approve the restructuring of Northern Rock. Richard Lambert, CBI Director-General, said: “We welcome today’s decision by the European Commission. When parts of Northern Rock come to be sold, this must be done in a way that delivers a good deal for the tax-payer and leads to greater competition in the UK banking sector.” Yesterday banking stocks were down sharply on speculation that Lloyds Banking Group and RBS would follow Northern Rock and be split up.
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