Lloyds share price: Bank sues RBS for £420m over rights issue

on May 22, 2014
Updated: Jun 1, 2022

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iNVEZZ.com, Thursday, May 22: Lloyds Banking Group (LON:LLOY) is joining a class-action lawsuit against Royal Bank of Scotland (LON:RBS), seeking £420 million over the lender’s “misleading” £12-billion rights issue, the Herald Scotland yesterday reported.

In what is seen as the first American-style class action to hit the English courts, Lloyds has joined more than 40,000 individual and institutional investors, alleging that they were misled during an emergency cash call in 2008, and claiming damages of nearly £5 billion.
RBS has rejected the allegations. “These things will be set out in court rather than in an early settlement, we have a good defence on this,” RBS CEO Ross McEwan said earlier this month.

Lloyds is suing RBS through nine of its pensions and investment management subsidiaries — Scottish Widows Plc, Scottish Widows Unit Fund Ltd, Pensions Management Ltd, Scottish Widows Unit Trust Managers Ltd, Clerical Medical Investments Group, Halifax Life, Clerical Medical Management Fund Ltd, HBOS Investment Fund Managers Ltd and St Andrews Life Assurance.

“The management in the relevant insurance businesses gave careful consideration as to whether it was in the interests of policyholders to join the legal proceedings and decided it was in their best interests,” a spokesman for Lloyds insurance arm, Scottish Widows, said, as quoted by the Herald Scotland.
**Lloyds cuts more jobs, closes Warrington call centre**

In a separate development, Lloyds said yesterday that it would cut 645 jobs as part of its strategic review announced in 2011, and add 65 new positions in its groups operations and retail unit.
The lender revealed that the reductions are within its group operations, human resources, consumer finance, retail and commercial banking units.
Lloyds also said it was shutting its Warrington Contact Centre as people preferred digital banking to telephone banking. As a result of the closure, Lloyds would make 180 redundancies and transfer 120 staff to Speke, in Liverpool.

“Telephone banking call volumes are falling as digital banking usage continues to grow, and we are refocusing the business to reflect these changes in our customers’ habits”, a Lloyds spokeswoman said yesterday, as quoted by Reuters.
**Shares relatively steady**

Lloyds’ share price has been swinging between gains and losses today. As of 13:20 BST, the stock was trading 0.16 percent higher at 74.46p. As of the same time RBS’ share price was 0.09 percent higher at 330.80p.
Of the 26 analysts projecting 12 month price targets for Lloyds for The Financial Times, the median target is 88.50p, with a high estimate of 115.00p and a low estimate of 55.00p.
Of the 23 analysts projecting 12 month price targets for RBS for The Financial Times, the median target is 320.00p, with a high estimate of 445.00p and a low estimate of 210.00p.
**As of 13:08 BST, buy Lloyds shares at 74.27p.**
**As of 13:08 BST, sell Lloyds shares at 74.24p.**
**As of 13:24 BST, buy RBS shares at 331.00p.**
**As of 13:24 BST, sell RBS shares at 330.80p.**


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Finance & Banking Stock Market