Royal Bank of Scotland, Lloyds in

Mayank Mehta
03 Nov, 2009
New York City

Banks in London traded lower after Royal Bank of Scotland and Lloyds Banking Group agreed to tighter bailout conditions in exchange of

[R]4:00 PM London, 11:00 AM New York – Banks in London traded lower after Royal Bank of Scotland and Lloyds Banking Group agreed to tighter bailout conditions in exchange of 31 billion.[/R]

UK stocks closed lower after Royal Bank of Scotland and Lloyds Banking Group receive £31.3 billion in second bailout.

Lloyds will raise £13.5 billion in rights offering in which UK government will participate with £5.8 billion purchase and £7.5 billion in bond exchange. UK government will retain its stake in the bank at 43%.

Royal Bank of Scotland agreed to sell its insurance division, limit bonuses and will shoulder first £60 billion in losses in loan portfolio compared to previous limit of £42.2 billion.

In London FTSE 100 Index closed lower 88.07 or 1.73% to 5,016.43 and the pound edged lower to close at $1.632 and edged higher to close at €1.113.

Gainers & Losers

Amino Technologies plc the online video services provider plunged 26.7% to 31.50 pence.

Associated British Foods plc fell 1.5% to 820.50 pence after the international food, ingredients and retail group said full-year revenues rose 12% to £9.3 billion from £8.2 billion a year ago. Net profit for the full-year rose 0.6% to £359 million or 45.5 pence per diluted share compared to net profit of £357 million or 45.2 pence per share a year ago.

Aviva plc dropped 3.4% to 375.80 pence as banks and insurance companies closed lower.

Braemar Group Plc closed unchanged at 1.52 pence after the property fund manager said its Guernsey listed Ground Rents OEIC had made two purchases.

Dunelm Group plc increased 4.7% to 341.40 pence after the specialist out-of-town homeware retailer said comparable sales in the ten week period to September 12 increased 16.1%.

Endace Limited the networking monitoring solutions provider fell 3.9% to 264.10 pence.

Hammerson PLC fell 2.2% to 383.80 pence after the property firm chief executive indicated that real estate markets are improving in UK and France.

Highland Gold Mining Limited rose 1.4% to 85.00 pence after the gold miner reported positive results from exploration at Mnogovershinnoye and Lyubov properties.

Lloyds Banking Group plc added 2.1% to 86.81 pence after the financial services group today received £235 million from the sale of Insight Investment Management Limited to Bank of New York Mellon. This completes the sale announced in August and comprises a cash consideration of £200 million and an equity consideration of £35 million.

Legal & General Group Plc rose 1.8% to 78.50 pence and the insurance group indicated recovering market conditions.

Microgen plc the business and trading software specialist surged 9.0% to 86.72 pence after the company indicated higher than expected profit in the third quarter. The company also sold its billing services unit to Swiss Post for £7.5 million.

Neuropharm Group Plc surged 29.2% to 21.00 pence after the speciality pharmaceutical company today announced that it is in discussions with merger partners and has retained Piper Jaffray Ltd to evaluate proposals.

New Britain Palm Oil Limited the Australasian palm oil producer closed unchanged at 365.00 pence.

The Royal Bank of Scotland Group plc decreased 7.1% to 35.93 pence after the troubled bank agreed to sell its insurance unit and not pay dividend for the next two years in exchange of £25.5 billion in government funding and additional credit line of £8 billion.

Rolls-Royce Group plc declined 2.6% to 439.70 pence after the aero engine manufacturer said trading activity across the Group’s businesses remains in line with expectations and 2009 earnings will match 2008 earnings.

St. James''s Place plc the wealth manager decreased 2.8% to 253.60 pence.

Stagecoach Group plc the bus and train group declined 2.3% to 139.90 pence.

Volex Group plc closed unchanged at 85.00 pence after the global electrical and electronic cable assemblies group said first-half revenues fell 17.7% to £110.2 million from £133.9 million a year ago. Net profit for the first-half rose 680% to £921,000 or 1.6 pence per diluted share compared to net profit of £118,000 or 0.2 pence per share a year ago.

The Weir Group PLC dropped 5.4% to 657.50 pence after the engineering group said during the third quarter the group has continued to perform well despite ongoing trading uncertainties in many of its markets.

Xchanging plc the business processing outsourcing company dropped 0.8% to 217.10 pence.