London: British banking major Lloyds Banking
Group is being kept afloat with a whopping 165 billion pound
of loans and guarantees from the Bank of England and other
central banks around the world, a media report said.
Citing a detailed document released last week in
connection with a separate 21 billion pound fund-raising, The
Sunday Times said: "The bank (Lloyds) is still 'heavily
reliant' on government funding." As per the document, Lloyds
drew down further loans early this year.
The government has extended the money through two funding
plans — the Special Liquidity Scheme, which gives loans, and
the Credit Guarantee Scheme, under which guarantees are given
to allow banks to get commercial loans.
"The support is nearly equal to the 175 billion pound of
UK government borrowing to be raised this year, and almost as
big as the Bank of England's 200 billion pound quantitative
easing programme," the report added.
Lloyds inherited most of the government loans from HBOS
after it agreed to acquire the bank in September 2008.
The report further said : The bank (Lloyds) said the
loans should be seen in the context of its one trillion pound
balance sheet, and said all western banks received state help
during the crisis.
The scale of Lloyds' dependency has however, surprised
analysts. They say it shows just how big a financial timebomb
it has become. They further added that few continue to be
helped on this scale.
The Lloyds document also reveals that the bank faces a
3.7 billion pound pension deficit and it is transferring 5
billion pound of assets to fill the hole, the newspaper added.
Meanwhile, the Royal Bank of Scotland is less exposed as
it has about 40 billion pound in state funds. It has cut its
dependency on state funding by 69 percent since the peak of
the crisis.
Bureau Report
First Published: Sunday, November 08, 2009, 15:52