Win Bischoff pays £225,000 to take part in rights issue

Published on Tuesday 17 November 2009 20:52

SIR Win Bischoff, chairman of Lloyds Banking Group, has given a personal vote of confidence to the bank's record forthcoming £13.5 billion rights issue by spending £225,000 on the bank's shares.

His purchase of 250,000 shares at 89.691p each entitles him to take part in the rights issue ahead of this Friday's deadline for participating shareholders to be on the Lloyds corporate register.

His dip into the market came as the EU is due today to approve the sale of bailed-out bank assets and as Tesco Bank boss Benny Higgins told a Frankfurt conference he is not interested in any of the branches being sold by bailed-out banks Lloyds and Royal Bank of Scotland.

"We don't need a branch network. We already have a very large physical presence," he said.

Lloyds and rival Royal Bank of Scotland both brushed off research yesterday claiming that they are among a raft of large European companies that have greatly under-estimated the size of their pension deficits.

Lloyds's stated pension obligations are 14.2bn (12.7bn) short of the real size of the deficit, while RBS's are 13.3bn behind, according to Paris-based research group, AlphaValue.

The researchers claim that a swathe of large European companies have cumulatively underestimated the size of their pension deficits by a combined 300bn.

But a Lloyds spokesman said yesterday: "We believe we have prudent (pension deficit] assumptions."

An RBS spokesman said: "RBS pension liabilities are calculated in accordance with the appropriate international accounting standards."

British Airways boasts the third-highest pension shortfall according to the research, of 10.5bn. BA announced a proposed merger with Iberia of Spain last week, but the Spanish airline has reserved the right to walk away from the deal if the outcome of a triennial review at the UK carrier's pension fund is not "reasonably satisfactory".

It is thought RBS's pension liability has been significantly reduced following controversial changes to its final-salary pension scheme last summer. AlphaValue's research goes up to end-2008.

Analysts said Bischoff's desire to qualify for participation in the coming Lloyds rights issue was expected.

Lloyds, 43 per cent-owned by the taxpayer, also plans to raise another 7.5bn from bondholders in its programme to stay out of the asset protection scheme, the government's insurance plan for banks' toxic assets.

Bischoff and the rest of Lloyds army of almost three million shareholders have until 11 December to decide whether to take up their rights.