Sep 22 2009
Tell Lloyds the answer is “No”
Question – Should LLoyds keep HBOS? – No
Should Lloyds enter its bad assets into a government insurance scheme? – No
Should Lloyds remain as a single mega bank? No
Should the taxpayer subsidise LLoyds bank? No
Should Lloyds continue doing all it is currently doing? No
It is very easy working out what should happen next for Lloyds. The taxpayers representatives – yes that’s the Chancellor and Lord Myners – should tell them the taxpayer is not going to put up another penny, nor underwrite anything more. The taxpayer will use his leverage and 43% stake to demand that Lloyds creates three competing UK banking groups from its current range of assets and sells two of them onto new owners as quickly as possible. The Competition authorities should make clear they intend to use their powers to require pro competitive solutions if Lloyds cavils at this requirement from the biggest shareholder. LLoyds will also be required to sell its overseas assets, unless it can sell the taxpayers shares in the whole remaing group at a profit for taxpayers.
I look forward to the “ongoing dialogue” with Lloyds that I was promised in their last letter to me. Despite telling them of my answer and my wish to hear from them, the silence has been deafening! (see this blog 4th September 2009)
14 Responses to “Tell Lloyds the answer is “No””
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
With respect, I think you may have missed their point.
When they say that they want a dialogue, your own good manners make you assume that it’s going to be a two-way thing.
“Dialogue” really means that they tell you what they are going to do. If you don’t agree, they tell you what they want again, ad nausiam. It’s your fault for not agreeing with them, not theirs for being wrong. Make your own association with an “esteemed” leader here.
I found the easiest way to deal with Lloyds as a customer was to take my business elsewhere.
How much better shape would the UK banking industry be if JR was leading the negotations rather than Mr Darling and Lord Myners?
Just received a letter from HM Revenue & Customs.
Payments for quarterly Vat returns are being moved from current Banks, to Citi Bank and Royal Bank of Scotland.
Assume this is to improve RBS (Governments/taxpayer) funded Banks performance, and perhaps at the same time reduce either the present Bank charges, or improve interest paid on their accounts.
I have no problem (indeed applaud) with the Government reducing its working costs of HM REVENUE & CUSTOMS, If that is what it is, but wonder if the move went out to competitive tender before a decision was made.
Looks like LLOYDS/HBOS has missed out.
These busted banks are like those sad case people who fill their houses and gardens with junk, and never do any cleaning or sorting out. Inevitably, other things creep in and the whole lot turns very nasty. All they do is sit there looking at it and frantically trying to keep their hands on all the foulness and filth. And I have to pay the bonuses that the government grants them to continue like this.
They could sell off a shed load of other assets too, Scottish Widows for a start. And Cheltenham & Gloucester. A good hard look at their business would reveal all sorts of stuff that could be sold to get our money back.
1. Halifax should be forced to return to being a building society- perhaps split into Halifax and The Leeds separately . Would very popular in the north of England.
2.BOS should be kept as a subsidiary pro tem and floated off sometimewith/without the assets.
3. Lloyds – just nurse it back to health and restore the dividend- the single most important fact in returning it to stock market estimation.
4.TSB – restore it as a local “people’s ” bank/ High street bank in all those areas where banks don’t operate any more. The ownership to be nationalised and the franchise for running it to remain with Lloyds.
Another popular move.
5 Cand G – return it being a building society on the same basis as TSB
Yes but for all that you’re suggesting to materialise, this Government would have to be serving the interests of it’s electors, and lets face it that isn’t going to happen.
It’s spelt Lloyds. Apart from that, top blog.
sell it all off!
Agreed JR, these banks must start selling anything that will raise some cash. We still don’t know how much they are getting from selling off the “toxics” in the scrap market. They still have £148 billion in reserve balances at the BoE, courtesy of Merv’s printing press. Until we are told otherwise, we must assume that our nation’s collective financial sector balance sheet, is insolvent to the tune of £148 billion.
With a little testicular fortitude, Merv will resist political pressure from the Treasury, to let this cash leak out of Threadneedle Street for a little pre-election binge.
Meanwhile, we now know that all Economists are snake oil salesmen – except the Austrian School. They have conned us for a few decades but now is the time to put them back where they belong; on a check-out at ASDA. There is a massive saving to be made at our Universities on “professors” of economics and finance.
We also now know that we should have bailed out the non-financial corporate sector, not the Banks – the people who employ people to make goods and services, see following:-
http://www.debtdeflation.com/blogs/2009/09/19/it%E2%80%99s-hard-being-a-bear-part-five-rescued/
That’ll teach them for supping with the devil.
If the UK had to break its own competition rules – as well as EU rules – to allow Lloyds to buy HBOS, surely Daniels knew there would be a price to pay at some point?
With the Lloyd’s share price languishing in the doldrums while those of other banks (even RBS, for heaven’s sake!) soaring it is evident that the HBOS deal was a crock. Lloyds should be glad to be shot of it!
Mean while, Up North:-
http://www.thestar.co.uk/headlines/Labour-apology-for-New-Deal.5665016.jp
Mike
As this government engineered the merger, it seems totally unlikely that they will admit that they were wrong and force a de-merger in any form. The only way that Lloyds will be split up is if the EU decides on that course of action, this government certainly won’t of its own volition.
As I understand it, Lloyds was a reasonably healthy bank, and like Barclays and HBOS would probably have survived without government assistance. One can only assume that those at the top had dreams of grandeur, like Sir Fred Godwin with RBS.
And for a country of our population, we need far more than four retail banking groups; with each group having about a quarter of the available customers, there is no incentive whatsoever to offer competitive services, they have plenty of customers already, why bother?
TSB. The bank that likes to say Yes! Yes! you can’t have a bank loan for a car, motorbike, holiday, impress girlfriend. This was the joke many years ago in my circle. How things changed.