HM Treasury statement on financial support to the banking industry
13 October 2008
The UK Government is making capital investments to RBS, and upon successful merger, HBOS and Lloyds TSB, totaling £37 billion, underlining that Government is not a permanent investor in UK banks.
The UK Government is making capital investments to RBS, and upon successful merger, HBOS and Lloyds TSB, totaling £37 billion, underlining that Government is not a permanent investor in UK banks. Following the completion of these capital investments, each of the above institutions will have a Tier 1 capital ratio in excess of 9%, well above international minimum standards
As part of its investment, the Government has agreed with the banks supported by the recapitalisation scheme a range of commitments covering:
- maintaining, over the next three years, the availability and active marketing of competitively-priced lending to homeowners and to small businesses at 2007 levels;
- support for schemes to help people struggling with mortgage payments to stay in their homes, and to support the expansion of financial capability initiatives;
- remuneration of senior executives - both for 2008 and for remuneration policy going forward;
- the right for the Government to agree with boards the appointment of new independent non-executive directors; and
- dividend policy.
The Government intends to create a new arms length body to manage the Government's shareholdings in recapitalised institutions on a professional and wholly commercial basis,
HM Treasury statement
The UK Government's 2008 Credit Guarantee Scheme
UK Bank Re-capitalisation: Revision to DMO Financing Remit 2008-09
© HM Treasury
