Newspaper article The Evening Standard (London, England)

Banks Bruised by Break-Up Moves

Newspaper article The Evening Standard (London, England)

Banks Bruised by Break-Up Moves

Article excerpt

Byline: Mickey Clark MARKET ROUND-UP

THE banks faced another harrowing sell-off session following weekend moves by the Government to start hiving off bits and pieces of Lloyds Banking Group, Northern Rock and Royal Bank of Scotland in order to appease the EU regulators.

Lloyds, which has also been given the go-ahead to proceed with a [pounds sterling]25 billion fund raising, fell 2p to 84.9p. while Royal Bank of Scotland (RBS) dropped a hefty 3.3p to a near fourmonth low of 38.6p, making it the biggest casualty among the top 100 companies. The Government's stake in RBS will grow from 70% to 84% when it joins the asset protection scheme.

Barclays touched a three-month low of 3143/4p before rallying hard to trade 31/4p better at 3251/4p. That compares with the 360p a share at which the Qatari sovereign wealth fund cashed in part of its holding last month worth an estimated [pounds sterling]1.3 billion. The Qataris made a cash injection in Barclays earlier this year which enabled the bank to avoid the Government's asset protection scheme.

It emerges that hedge fund manager Crispin Odey, who made a fortune from predicting events during the banking collapse, has also sold part of his holding in Barclays. He emerged with a 1.5% stake in Barclays shortly after its shares struck a record low of 51p back in March. Now he has chosen to cash in by offloading most of his holding, having seen the shares grow sevenfold since their low point.

Elsewhere, investors pulled themselves up by their bootstraps in an attempt to claw back some of last week's losses among leading shares. The FTSE 100 Index rose 23.24 to 5067.79, led by the miners. They were marked higher in thin trading, reflecting slightly firmer raw material prices. Sentiment was also flavoured by whispers that BHP Billiton, 281/2p better at 1672p, may renew its bid for rival Rio Tinto, up 1001/2p at 27931/2p. …

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