Taxpayers nursing £32bn loss on Lloyds

Thrugelmir

Fella wrote: »

Of course the price needs to be way higher than what was paid for it for us to recover just what we paid, the reason being that as soon as the UK Govt starts to unload it's shares it'll trash the price.

When Lloyds starts paying a dividend then this will go to treasury. So selling all the shares can be staggered.

BP was held as a nationalised holding for years.

CLAPTON

Fella wrote: »

Of course the price needs to be way higher than what was paid for it for us to recover just what we paid, the reason being that as soon as the UK Govt starts to unload it's shares it'll trash the price.

We may get our money back eventually but it needs the shareprice to go much higher than £0.50 & for the shares to be dripped back into circulation over a long period of time.

why is that?

Fella

CLAPTON wrote: »

why is that?

Sorry why is what?

wotsthat

Thrugelmir wrote: »

Page 8. Net cost of investment 63.2p.

http://www.ukfi.co.uk/releases/115_2%20FW%20Update%20Jan%202010_10_AW_LR.pdf

Oh yes. The 50.2p in the OP is related to the RBS purchase. (p7)

Therefore latest situation..

Lloyds - purchase price £0.632 - current price £0.562

RBS - purchase price (equiv) £4.99 - current price £3.36

Situation much improved in 2012 but some way to go and as Generali says the cost of raising the capital for the bailout needs to be considered.

michaels

Capital is free if you borrow from the BoE and they refund you the interest

wotsthat

Following a 'buy' recommendation from UBS Lloyds have gained in value by another 6% to 54p.

From Sharecast.com

That comes in anticipation of an expected improvement in mortgage lending and a reduced need to raise capital after the Basel committee on banking supervision last Sunday eased financial institutions’ liquidity requirements.

UBS seem to think that return to lending will be so pronounced that...

“The UK is over its experiment of combining fiscal and monetary austerity,” sentenced analysts at Swiss broker UBS this morning.

So much so in fact that in their opinion the incoming Bank of England governor’s openness to monetary policy innovation may not even need to be tested if, as they expect, banks return to lending.

pqrdef

michaels wrote: »

Capital is free if you borrow from the BoE and they refund you the interest

Speaking of which, the BoE has bought gilts at hefty premiums. If it sells at lower prices, or holds to redemption, will the taxpayer defray its losses?

Linton

pqrdef wrote: »

Speaking of which, the BoE has bought gilts at hefty premiums. If it sells at lower prices, or holds to redemption, will the taxpayer defray its losses?

Gilts are still at a (small) positive yield to maturity. ie if you buy at the market price now and hold til maturity the interest gained will more than compensate you for the premium you paid.

PaulF81

wotsthat wrote: »

Why should the government sell at a loss? They aren't a forced seller.

Depends on what lies around the corner. If this stuff we have bought was as cr*p as I suggested in 2009 and the eurozone goes pop, we could end up oweing a whole load more if they mark down the price of the assets held.

Good news is, we all know now why that QE cash isnt causing rampant inflation. Its being gobbled up by the RBS/Lloyds black hole.

Linton

PaulF81 wrote: »

Depends on what lies around the corner. If this stuff we have bought was as cr*p as I suggested in 2009 and the eurozone goes pop, we could end up oweing a whole load more if they mark down the price of the assets held.

Good news is, we all know now why that QE cash isnt causing rampant inflation. Its being gobbled up by the RBS/Lloyds black hole.

It is being gobbled up by the banks to replenish their reserves. Where do the banks put their reserves? In the BoE!