Jump to content
House Price Crash Forum
Sign in to follow this  
House Master

Will The Taxpayer Make A Profit On It's Stake In Lloyds Banking Group?

Recommended Posts

Tax payer bought in at 120p shares. Share price is now 92p and rising based on some shocking results in the middle of a recession. Surely a profit for the tax payer is now a very real prospect.

What are the implications of this?

Discuss.......

Share this post


Link to post
Share on other sites

it's more complicated than that though - a) the megaexpensive borrowing from the Treasury B) the pref shares with a 12% coupon c) the assets that have been guaranteed by the government and c) the fact that if they try to offload the shares the price will drop a lot (ask Gordon about what happens when you try to sell assets off)

If I were LTSB management I'd be making sure I got rid of the prefs first - far too expensive, then I'd want to make sure that the government could not dilute my shareholders and so seize the entire bank and then I'd be looking after my own position (protecting me from the shareholders and the government). I'll let you guess what order I'd do those in....

Share this post


Link to post
Share on other sites
The taxpayer will get screwed, I can't see us ever making a profit the losses are going to be huge.

The loses are already huge. They are not being hidden from the market. Despite this the share price continues to rise.

Share this post


Link to post
Share on other sites
Tax payer bought in at 120p shares. Share price is now 92p and rising based on some shocking results in the middle of a recession. Surely a profit for the tax payer is now a very real prospect.

What are the implications of this?

Discuss.......

If you believe they have avoided a credit bubble collapse by getting further into debt then yes they can make a profit,

However if you are remotely sane and posess an ounce of economic sense then no there is absolutely no chance.

Whilst i still think there is a chance of selling the shares at a decent profit (timing wise id say around this time next year)

Im 99.999% certain that the loans that they have underwritten will bankrupt the UK at some point within the next 3-4 years and the muppets who they sold back the shares too (if they can) will also be bankrupt within the next 4 years as the shares will be worthless

Share this post


Link to post
Share on other sites
it's more complicated than that though - a) the megaexpensive borrowing from the Treasury B) the pref shares with a 12% coupon

I seem to recall about a year or 18 months ago, HBOS issuing some corporate debt with ~10% yield. So 12% for prefs was not outlandishly expensive, given what a piece of junk it is.

I doubt the taxpayer will make a profit. For a start, even if the share price gets above 120p, the moment there is talk of an imminent UKFI placement, the stock will tank again.

The Treasury will be desperate enough for cash to sell it at a loss a while before the shares can be placed above 120p.

Edited by Toilet-Currency

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   292 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.