Shares in the new Lloyds Banking Group, created on Monday through Lloyds’ takeover of mortgage lender HBOS, plunged 31% on Tuesday to close at 44.8p. The huge sell-off in UK bank stocks this week was triggered by news on Monday that Royal Bank of Scotland would announce a 2008 loss of up to £28bn. But investors’ concerns on Tuesday centred on Lloyds, and fears that it risks having to raise more capital to absorb losses from HBOS’s corporate loan book. There was little new information to explain such a large fall. Indeed, Lloyds made clear on Monday it had “traded satisfactorily” since it updated the market in mid-December.

This entry was posted by Gwen Robinson on Wednesday, January 21st, 2009 at 5:43 and is filed under Capital markets, M&A. Tagged with Lloyds Banking Group. Edit this entry.