Banks round-up: Osborne announces plans to sell more Lloyds shares
The UK banking sector emerged as the biggest loser after this week’s budget announcement, which revealed that the government would raise the bank levy by a third. The increase is expected to result in £5.3 billion of additional costs for the industry over the next five years.
A day after the announcement, the FT reported that two big investors in Standard Chartered Plc (LON:STAN) urged the bank to consider moving its headquarters away from the UK. “Moving headquarters is not easy and it may not be worth it, but this should be considered,” the FT quoted a top 10 shareholder in StanChart as saying.
Other reports suggested that investors in HSBC Holdings Plc (LON:HSBA) had also encouraged the bank’s board to consider switching headquarters. Both StanChart and HSBC have the bulk of their operations overseas, although the latter also has a large UK retail and commercial bank. The two banks are expected to contribute a combined $2 billion a year towards the bank levy after the increase.
In other banking news this week, chancellor George Osborne announced in his budget statement on Wednesday that the government would offload a further stake in Lloyds Banking Group Plc (LON:LLOY). Osborne said that he expects to raise an additional £9 billion from the sale. Meanwhile, Spanish bank Sabadell made a formal offer of 340p a share for TSB Banking Group Plc (LON:TSB), the challenger bank spun out of Lloyds last year. The offer, which was recommended by the TSB board, values the mid-cap bank at £1.7 billion. Lloyds confirmed that it would sell its 50 percent shareholding.
This week also saw news from Barclays Plc (LON:BARC), as the lender slashed the payouts to its senior managers in half, ahead of its annual general meeting next month. The bank announced on Tuesday that its top executives had received £16.5 million in shares for deferred bonuses and new awards, down from £31.8 million a year earlier. Also this week, Barclays appointed Miray Muminoglu as head of long-term unsecured funding and capital issuance. Muminoglu, who currently works as a director on the investment bank’s fixed income syndicate desk, will join Barclays’ treasury capital markets execution team next month.
Royal Bank of Scotland Group Plc (LON:RBS) also made headlines this week, after scrapping its listing on Euronext Amsterdam. On Wednesday the government-backed lender announced that it had requested Euronext Amsterdam to delist the company’s ordinary shares of 100p from April 17,citing low trading volumes as a reason for the move. Meanwhile, on Thursday Reuters reported that the bank had sold debt assets in Dubai World. The newswire attributed the information to unnamed sources, who didn’t specify whether RBS had sold the entirety of the debt it holds, or just a portion of it.
In yesterday’s trading HSBC’s share price closed up 1.3 percent at 584.70p; Lloyd’s share price finished the session 1.4 percent higher at 80.63p; Standard Chartered shares rose two percent to 1071.50p; RBS shares climbed 2.2 percent to 356.30p and Barclays added one percent to 255.30p.
As of 14:42 GMT, Saturday, 21 March, Lloyds Banking Group share price is 80.63p.