Shares in Lloyds, the bank group which rescued HBOS, soared by 7.4% in early trading today as it emerged the Government was on the verge of increasing its stake in the bank from 43% to about 60% reports The Times .
The deal would see Lloyds ringfence risky assets worth up to £250bn in the Government's Asset Protection Scheme. At the same time, the bank would convert the costly preference shares held by the Government, on which it is paying 12% interest, into ordinary shares, which draw no interest. An agreement could be announced this afternoon. Relieved investors sent Lloyds' shares up 3p to 43.3p this morning. Lloyds had been hoping to announce an agreement with the Government over the Asset Protection Scheme last week. Gilts saw their biggest one-day jump in living memory after the Bank of...
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