Can anyone make sense of this?

[Gromit]

// The Treasury is expected to rake in £1.4bn from the sale of 620 Lloyds sites and the whole of Northern Rock, in a move which is likely to change the face of UK high street banking.

Investment banks are putting the finishing touches to sale documents that will start the bidding process on £4.4bn worth of assets and could introduce a new name to mainstream high street banking. //

http://www.telegraph....-Lloyds-branches.html

How can selling £4.4bn worth of assets for £1.4bn be a good idea? After bailing out the banks are the tax payers being further ripped off by such give aways?

[Sqad]

Gromit....depends on the agreement..........if we (the tax payer) pocketed £1.4 billion and kept our share % in the stock....then as i see it, it might be a good deal.......... but ! don't know the details.

[DTCwordfan]

And to add to the comment, it helps clean up the portfolio for the eventual refloation. There were articles in the FT and serious press back at the start of the year that the Govt may see Lloyds alone being worth some £45 bln when it comes to that stage - so one must assume that RBS may be worth something similar and then there is the rest for Northern, Dunfermiline and the others.........

IMO, this is what DC and GO are in part betting on as we swing in towards the next election, plus some signs of strong growth shoots in the economy. The article today in the Observer has shades of that similar letter from economists weeks before Thatcher's economic figures showed a massive turn around happening, largely resulting in her re-election as the economy went into a strong bull run.

[R1Geezer]

I think you'll find the £1.4billion will be the government's share of the money that they divide among the shareholders,they will still have their shares. As a result the share price of Lloyds will rise too so he government gets that value too.

[Gromit]

The Government own 43.4% of Lloydstsb. I am still struggling to make the £1.4bn add up?

[R1Geezer]

Can you let me have the figures you are working with Gromit

[Gromit]

Correction. 43.5% was the initial bailout.

// The Government sealed the deal yesterday and will raise its investment in the group from 43.5% to at least 65% – or 77% including non-voting shares – in exchange for insuring more than £260bn in risky assets.

[Huderon]

Someone in that article didn't do their sums right

// At the same time, Deutsche Bank is compiling an information memorandum on Northern Rock which will be used to market the state-owned bank and its 70 branches. It is expected to generate around £1.4bn for the Treasury. //

That's where the £1.4bn figure comes from - selling the Lloyds branches will bring in some more money, but the only reasonably certain figure they have is for the Northern Rock sale, hence the headline figure.

[Gromit]

The Telegraph article is very badly written. This makes is better, and I now understand the figures.

http://www.bloomberg....n-telegraph-says.html

[R1Geezer]

So nothing to bash the government with here then Gromit!

[Gromit]

Yep, bit of a non question in the end. Move along now, nothing to see here.

[factor-fiction]

The only referenece to £1.4billion is the amount expected to be raised from the sale of Northern Rock. I think any money from the sale of Lloyds would be in addition to that figure

[ubasses]

The sale of LLoyds brnches will rake in £3bn and will belong to Lloyds bank of which the Government (taxpayer) is a shareholder and the only gains will be if the share price goes up.

The £1.4bn is for the sale of Northern Rock which is owned by the Government (taxpayer) and will go directly into the country's coffers.

So no-one as far as I can see being ripped off here. We will get our money back from Lloyds when the share price is good enough for them to be sold at a profit.

[Gromit]

Yes, I understand that now after reading the Bloomberg report. I like the Telegraph, it is my favourite newspaper, but this report was very confusing.

[factor-fiction]

I agree, Gromit, that they could have set out /explained the figures better

[modeller]

I don't know where this fits into the picture but over the past 6/9 months Lloyds have closed down 400 branches of Halifax .