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4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Lloyds Banking Group    LLOY   GB0008706128

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Lloyds Banking : was not bullied into buying HBOS, high court hears

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10/20/2017 | 05:45pm CEST

Lloyds Bank and five of its former directors “emphatically reject” allegations they were bullied into taking over HBOS, their QC has told the high court.

Helen Davies was responding to claims made by 6,000 Lloyds shareholders, who have brought a £600m compensation claim that they were not given a true picture of the financial health of HBOS when they voted through the takeover in November 2008.

When the case opened on Wednesday, the shareholders’ QC, Richard Hill, had said Lloyds had been bullied into taking over HBOS by being told it would need a £7bn government bailout in October 2008 if it continued as a standalone bank.

Lloyds announced the takeover of HBOS on 18 September 2008. The government eventually took a 43% stake in the enlarged Lloyds Banking Group. It no longer owns any shares after selling its final tranche in May.

Davies said the directors, who include former chairman Sir Victor Blank and former chief executive Eric Daniels, emphatically rejected the idea that the demand by regulators that it find £7bn of capital was a “naked threat”.

Blanks and Daniels are scheduled to give evidence in the coming weeks along with three other former directors named in the case : former finance director Tim Tookey, ex-head of retail Helen Weir, and former head of wholesale banking Truett Tate.

Hill told Mr Justice Norris at the start of the case on Wednesday that the the deal took place amid intervention from the then prime minister, Gordon Brown, to avoid the nationalisation of HBOS in September 2008.

The shareholders, Hill said, were “mugged” during the transaction and were not told about loans HBOS was receiving from the Bank of England and Lloyds itself.

Davies said that Lloyds had found that the requirement for an extra £7bn of capital was not negotiable with the Financial Services Authority, the then City regulator.

This was set out during the weekend in October 2008 when the UK was orchestrating a so-called recapitalisation exercise of its banking sector. The City regulator, she said, had wanted to “bullet proof” the banking sector and had rejected Lloyds’ calculations that £3bn of capital would be required.

She said it was the responsibility of investment banking advisers at Merrill Lynch, UBS and Citibank to ensure that information sent to Lloyds shareholders was correct. During this transaction, she said, UBS had the primary responsibility for dealing with the UK Listing Authority, which oversees stock market-listed companies and analysed the information. “This is not just a box-ticking exercise,” Davies said.

Copyright © 2017 theguardian.com. All rights reserved., source Guardian Online

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Financials ( GBP)
Sales 2017 18 339 M
EBIT 2017 8 910 M
Net income 2017 3 435 M
Debt 2017 -
Yield 2017 5,94%
P/E ratio 2017 13,34
P/E ratio 2018 10,68
Capi. / Sales 2017 2,63x
Capi. / Sales 2018 2,60x
Capitalization 48 203 M
Chart LLOYDS BANKING GROUP
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Lloyds Banking Group Technical Analysis Chart | LLOY | GB0008706128 | 4-Traders
Technical analysis trends LLOYDS BANKING GROUP
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 0,74  GBP
Spread / Average Target 11%
EPS Revisions
Managers
NameTitle
António Horta-Osório Group Chief Executive Officer & Executive Director
Norman Roy Blackwell Chairman
Juan Calafat Colombás Chief Operating Officer & Executive Director
George Mark Culmer Chief Financial Officer & Executive Director
Anita Margaret Frew Deputy Chairman
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