I have shares in the banks

Neil_G_2

Further to my previous posts, just to update all customers and shareholders, following last Friday's HBOS meeting we have added the latest information on our website: www.lloydstsb.com/hbosacquisition Hope you find this useful. Neil, on behalf of Lloyds TSB.

sabretoothtigger

Banking giant HSBC continues to encounter selling pressure on fears that it may need to raise funds, or chop its dividend, or both. Earlier this week CLSA Asia-Pacific Markets suggested that HSBC will seek to raise $15bn to shore up its capital base, as its loan book in the US and UK suffers further write-downs.

hsbc down 6% today

12 Dec: 10:00am HBOS Court Meeting and 10.10am General Meeting held, at which the HBOS shareholders approved the proposed acquisition and HBOS’s capital raising plans

w/c 15 Dec: Lloyds TSB shareholders were sent Application Forms to purchase shares in the Open Offer

9 Jan 2009*: 11:00am Closing date for completed Application Forms for Open Offer Shares.

Second half of Jan 2009: Day 1 on which both companies become one legal entity under the new Group name, Lloyds Banking Group plc.

* These dates are indicative only and will depend, amongst other things, on the dates upon which the Court actually sanctions the Scheme and/or confirms the associated reduction of capital.

I like how its called an acquisition not a merger despite hbos being twice the size of lloyds. It does suggest some vivacious liposuction will be applied.
The other banks all grew in the boom while lloyds mainly ticked over but now the world is five minutes to destruction its going to triple itself like something out of 'the blob' - audacious.

meanwhile shareholders think the board has been smoking dollar bills and the chlorine poisoning has warped their brains

mrposhman

I think the point you should be making is HBOS used to be bigger than Lloyds. The mismanagement of the company have led to the following.

HBOS at 64.5p - market cap = £3.6bn
Lloyds at 126.4p - market cap = £7.5bn

Lloyds is now valued at more than twice as much as HBOS.

Is your basis of "twice the size of Lloyds" based on historic profits and historic assets? If so, rip up the rulebook, its all changed.

fullstop

One bank to have a successful rights issue , Standard Chartered today announced that nearly 97% of it's shareholders had taken up the offer.

sabretoothtigger

Santander was fine also I think?


To me market cap is just a virtual value , I was referring to assets and customer base, etc but yea your right thats what they base it off.
Its still the small fish swallowing the bigger one whole just like when aol took over time warner (more of a merger then this is) and that was also the result of a bubble

Time repeats itself maybe, except in reverse this time hopefully (aol stock was rated 200bn, later 20bn)

http://en.wikipedia.org/wiki/Aol

mrposhman

sabretoothtigger wrote: »

Santander was fine also I think?


To me market cap is just a virtual value , I was referring to assets and customer base, etc but yea your right thats what they base it off.
Its still the small fish swallowing the bigger one whole just like when aol took over time warner (more of a merger then this is) and that was also the result of a bubble

Time repeats itself maybe, except in reverse this time hopefully (aol stock was rated 200bn, later 20bn)

http://en.wikipedia.org/wiki/Aol

Based on historical assets, HBOS were much larger. Having seen the writeoffs we have seen this year and most likely further write offs to come, Lloyds balance sheet will now look much healthier hence the greater value afforded to Lloyds.

sabretoothtigger

Yea I read that though dont really fully understand how they could translate to the share price.
They have fallen 30% in the last week

mrposhman

sabretoothtigger wrote: »

Yea I read that though dont really fully understand how they could translate to the share price.
They have fallen 30% in the last week

I would suspect that the market doesn't believe what the banks are saying resulting in the last weeks firesale. I expect people are expecting more writeoffs to be unearthed.

For example, RBS has fallen from 70p last thursday to under 42p today which is a 40% fall in a week similar to that of HBOS. I sold out on a 26% loss yesterday but consideringof buying back in when they are low.

I would expect the firesale to continue for a few more days.

I have no idea why HBOS has fallen by as much as it is though maybe when their accounts are released at the year end, their balance sheet may answer the questions we have (this is for all banks not just HBOS).