Part-nationalised British lender Lloyds Banking Group is sounding out investors about a 15 billion pound ($23.81 billion) rights issue to help it avoid a government scheme to insure it against credit losses, The Financial Times reported on Thursday.
Banking regulator the Financial Services Authority (FSA) is scrutinising the plan, the FT said, citing people close to the planning for the deal, in which Lloyds would also sell assets such as insurance business Scottish Widows, and shrink its balance sheet.
On Wednesday, Sky News reported that Lloyds had presented the FSA with a plan to raise 25 billion pounds through a rights issue, asset disposals and other measures to allow it to withdraw completely from the government-sponsored asset protection scheme.
The FT said the government, which owns a 43.5 percent stake in Lloyds, would likely subscribe to the rights issue and could inject a further 6.5 billion pounds of public funds into the company.
A detailed plan could be presented to finance minister Alistair Darling within days, the FT said, citing one person close to the affair.
Lloyds and the FSA declined to comment on the reports.
Lloyds said last month that it was in talks with the government to scale back or cancel its participation in the so-called asset protection scheme, seen as expensive and potentially unnecessary following an upturn in the economy since it was first drawn up in March.
The FSA had previously set tougher-than-expected capital conditions on Lloyds’ potential exit from the programme, making an outright departure less likely
