There will not be too many smiles on the faces of anyone who has bought shares in the part nationalised UK banks within the past 6- 9 months. For Lloyds currently at 87p and RBS at 37p share prices are falling and it’s not difficult to see why. You may well be thinking that it’s just tough luck for speculators and no concern of yours, but hang on, Royal Bank of Scotland is 70% Government/Taxpayer owned, Lloyds 43%, we are all shareholders with an interest in this.
We are told that break up of Britain’s part nationalised banks is to appease European Commission concerns over a lack of competition within the banking sector. We can’t remember any of these concerns being made at the time when Lloyds were instructed by the UK Government to take over ailing HBOS, a move which jeopardised the stablility of the Lloyds group sufficiently that they then required a taxpayer bailout.
Both Lloyds and RBS hold some great companies within the groups, RBS have household names Churchill and Direct Line insurance, while Lloyds have Cheltenham & Gloucester and Internet bank Intelligent Finance. Because the banks have still been holding these profitable assets they have attracted investors to buy shares in both thinking that these together with the regular banking operations could see Lloyds and RBS turnaround and their share prices continue to improve.
However it now looks as if none of this is to be. Lloyds and RBS will be forced to part with the goods parts of their business, leaving the taxpayers and other shareholders the bad debts or Toxic Assets as they are known.
In the view of the team here at Loans2you, this seems unfair to shareholders as well as a bad deal for taxpayers who are still in the case of RBS going to have to pay another £20 billion extra to buy further shares in the bank taking the government and taxpayers stake up to 84%.
Let the MoneyTalks team at Loans2you know your thoughts on this www.loans2you.net
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