Lloyds Banking Group is now likely to take part in the government’s insurance scheme to ring fence toxic assets in spite of attempts to wriggle out of the programme.
Lloyds signed up to the insurance scheme in March, giving itself the option of ring fencing £260bn of toxic assets, mostly taken on when it acquired mortgage lender HBOS.
However, Lloyds, 43.5% owned by the government, still aimed entirely to bypass the scheme raising £15bn-£20bn through measures such as a rights issue and disposals, for instance of Scottish Widows.
Lloyds was unhappy with the original asset protection scheme terms, which would have given the taxpayer as much as 65% of the bank. Lloyds was then in a weak position and its shares had hit an all-time low of 36p. They now stand at 104.7p.