Lloyds to fulfil capital requirements without fundraising

Lloyds Banking Group said it will be able to meet new heavier capital requirements from its existing business and selective disposals.

Lloyds Banking Group said it will be able to meet new heavier capital requirements from its existing business and selective disposals.

In March, the Bank of England's new financial stability regulator, the Financial Policy Committee (FPC), had stated that Lloyds was overstating its capital by £3.0bn, and by the end of the year it would need to make up this difference.

Lloyds has now been informed by the Prudential Regulation Authority (PRA) of its exact new minimum capital position to enable it to absorb any future losses on loans.

Lloyds, which is 41% owned by the UK government, said it would be able to meet the new levels without taking recourse to further equity fundraisings or the utilisation of additional contingent capital securities.

An announcement from the group said it expected to meet its additional capital requirements through its "strongly capital generative core business, continued progress in executing the group's customer focused strategy and further capital accretive non-core asset disposals".

Lloyds reaffirmed its fully loaded core tier 1 ratio under new Basel III capital rules would be above 9.0% by the end of 2013 and above 10% by the end of 2014.

Group Chief Executive Antnio Horta-Osrio said: "We are pleased with the substantial progress being made in the delivery of our customer focused strategy.

"Our strong capital position enables the group to actively support growth and lending in the UK economy as well as delivering sustainable results for our shareholders."

Shares in Lloyds were up 1.4% at 62.38 at 08:20 on Wednesday.

OH

Recommended

Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
The after effects of the gas-price shock
Economy

The after effects of the gas-price shock

In the wake of the recent spike in the natural gas price, we can expect slower growth, an industrial recession – and a newly assertive Russia, says Ma…
17 Oct 2021