Economy

Lloyds Banking Group 'overcapitalised'

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Economy
Written by Roberta Murray   
Friday, 10 September 2010

Morning Business News, Friday 10 September: Lloyds Banking Group, Vodafone, Deutsche Bank, Eurozone rules tighten.

Lloyds Banking Group (LON:LLOY) is reported to have 'far too much capital' thanks to restrictive European rules.

According to UBS if it were not for European Union restrictions Lloyds Banking Group could be returning billions of pounds to shareholders, according to analysts at UBS.

For every £1 that Lloyds is currently making, it could easily afford to return far more to investors.

However, because of EU rules on state-aid, the partially government-owned bank is barred from making any payments to shareholders, the Telegraph reports.

Vodafone Group


Vodafone Group Plc (LON:VOD) announced a significant reorganisation yesterday in a clear sign that it plans to offload its minority stakes in other mobile operators.

The company said it planned to simplify its structure by moving from three operating regions — Europe and Africa, Middle East and Asia Pacific — to two.

The first will comprise Vodafone’s operations in Europe and the second its operations in Africa, the Middle East and the Asia-Pacific region, the Times reports.

Deutsche Bank rights issue


Deutsche Bank is preparing to unveil a rights issue worth up to €9bn (£7.4bn) in a move aimed at softening the impact of new capital rules set to govern the international banking industry.

The fund raising, which will be the largest undertaken in Europe this year, is expected to be announced as early as Monday.

It will come shortly after global regulatory chiefs meet in Basel, Switzerland, to approve the new capital and liquidity measures drawn up by the Basel Committee on Banking Supervision, the international watchdog, the Telegraph reports.

Eurozone public finances


Eurozone members that break the region's rules on public finances should be excluded temporarily from Europe’s political decision-making, the president of the European Central Bank has proposed.

The controversial suggestion by Jean-Claude Trichet, in an interview with the Financial Times, would be part of a “quantum leap” in the governance of Europe’s 11-year old monetary union, needed to prevent a future Greece-style economic crisis.


 

 
 
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