£37 billion recapitalisation package for lenders

News Article - 21 May 2012
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The government is to make capital investments totalling £37 billion in the UK banking sector.

Both Royal Bank of Scotland (RBS) and Lloyds TSB will be provided with the funding designed to improve the lenders' overall business health.

According to the Treasury, this package of investments will provide each of the institutions with a Tier 1 capital ratio "in excess of nine per cent".

Lloyds TSB will be provided with its new funding following the successful completion of the acquisition of HBOS.

The £37 billion in funding for the scheme will be raised through a gilt and Treasury bill sales programme by the Debt Management Office, which will begin on October 20th 2008.

"These institutions committed in aggregate to increase their total tier 1 capital, either through their own actions or, where requested, through support from the Government's recapitalisation scheme in the form of preference and ordinary share capital," the Treasury said.

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