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September 3, 2009

Lloyds no longer among world’s 50 safest banks

by Gill Montia

Story link: Lloyds no longer among world’s 50 safest banks

Lloyds Banking Group shares came under pressure yesterday on the news that the group has not appeared in the 2009 list of the world’s 50 safest banks, Lloyds TSB having taken sixth place in the 2008 list, as prepared by Global Finance Magazine.

The disastrous merger of Lloyds TSB and HBOS has left the group 43% state-owned and its troubles are far from over, with losses from the HBOS side business “at the worst end of expectations”, according to outgoing chairman, Sir Victor Blank, speaking last week.

A restructure of the group is underway with around 7,500 job losses so far this year and most notably, the bank has yet to reach agreement with the Treasury over its participation in the UK’s Asset Protection scheme.

At one point, the group was expected to lodge around £260 billion of risky loans with the insurance scheme but such a move would leave it around 60% state-owned and it is said to be investigating other options, including raising money from shareholders.

Returning to Global Finance Magazine’s safest bank list, Germany’s KfW topped the list, while HSBC and Nationwide were the only UK banks included, at 18th and 46th place respectively.

Banco Santander (owner of Abbey, Alliance & Leicester and Bradford & Bingley) came 13th.

Global Finance makes it selection through a comparison of the long-term credit ratings and total assets of the 500 largest banks around the world.

Ratings from Moody’s, Standard & Poor’s and Fitch were used in this, its 18th edition.

 

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