Statement from the UK Treasury:
- Lloyds Banking Group will not participate in the Asset Protection Scheme, Royal Bank of Scotland will participate in the scheme under revised terms (details below).
- Lloyds and RBS will be required to make divestments of significant parts of their businesses over a four year period.
- Divestments will represent almost 10 per cent of the UK retail banking market.
- Executive members of RBS and Lloyds have agreed to defer bonus payments for 2009 until 2012.
- Lloyds and RBS not to pay discretionary cash bonuses to staff earning over £39,000 per year.
Statement from Lloyds Banking Group:
- Lloyds announce a £13.5bn fully underwritten rights issue of which the UK Treasury will subscribe in full for its 43 per cent stake.
- Lloyds announces exchange offer to raise at least £7.5bn in contingent core tier 1 capital.
- The European Commission has required Lloyds not to pay coupons or dividends on its hybrid capital securities.
- Lloyds will pay the government a fee of £2.5bn in return for implicit benefit of taxpayer protection.
- Lloyds disposals will include Lloyds TSB Scotland, Intelligent Finance, C&G and the TSB brand.
Statement from Royal Bank of Scotland:
- RBS to issue £25bn of new capital to HM Treasury in the form of ordinary shares, convertible into ordinary shares.
- RBS says HM Treasury ordinary shareholding remains at 70.3 per cent, while the “economic interest” now stands at 84.4 per cent.
- Size of RBS APS pool cut from £325bn to £282bn, while the first loss on the pool, including provisions, increases from £42bn to £60bn.
- The cost of the APS for RBS will be an annual fee of £700m from 2009-2011, dropping to £500 per year afterwards.
- UK Treasury to remove RBS undertaking from February to forgo tax losses and allowances estimated at £9-11bn.
- RBS will agree not pay any coupon or dividends on existing hybrid capital for 2 years.