Lloyds bank is a part of Lloyd’s group which also owns The Royal bank of Scotland as one of their operational units. The government had invested more than £21.2bn for more than eight years and finally, they now own 43 percent of the shares after selling the remaining of it. But they still have a 73 percent stake in the Royal Bank of Scotland. This wasn’t a sudden decision or process and continued for nearly past five years wherein the Government was selling their shares in the market. Lloyds bank is hoping to provide the desired returns to the Government over a period of time.
The Controversial Situation of Lloyds against the investments and the expected returns.
The situation is tensed because many analysts consider that the long term losses due to investments were not taken into consideration and only the invested amount is highlighted by the bank. Many also argued that the bank didn’t consider the return of investments i.e. the interest is also neglected by the bank. Bank has already repaid the total amount invested by the shareholders for purchasing of the shares in the form of a dividend. In fact, the bailout that would be happening next week is expected to support the Government with additional £500m wherein the expected real amount is supposed to be £900m.
Lloyds Turnaround would cost job loss of more than 57,000 employees.
The trading and selling of shares were successfully executed by Morgan Stanley at an average price of 73.5p in all three bailouts. This turnaround led to firing more than 57,000 employees across their branches to maintain the profitability after paying back the amount to the Government. Lloyd bank is forced to sell more than 600 branches because of the competition rule and has to keep aside £17 billion for the PPI misselling scandal which the bank got caught in. The only good thing that happened with the bank this year was the total profits earned by the bank this year which was £4.3 billion.
On one hand Lloyds bank managed to retain their profitable position even after returning the public share, but on the other hand, even after receiving two bailouts Royal bank of Scotland cannot gain profitable numbers for the Government as well as other stakeholders. This year they recorded a consecutive nine years failure and losses for £7 billion. Apart from that, they bank is also in controversy related to some past issues wherein the lenders have to pay back £5.9 billion as charges for their misconducts. They are also liable to pay back to the small entrepreneurs and business owners for their controversial Global Restructuring Group.
Daniel is acting editor of Talk Herald with over two years of experience in the field of online news under his belt. Daniel has worked with multiple media houses and is currently leading a team of journalists, sub-editors, and writers through his entrepreneurial endeavors.
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