Lloyds bank has too much money, say analysts

Lloyds Banking Group is in the rare position of having far too much money and, if it were unrestricted by European Union regulations, would be able to pay out billions of pounds to its shareholders, according to analysts.

 
The UBS report claims that compared to the amount of money Lloyds is making, the bank could afford to give far more money back to investors. Because of EU rules on state aid however, the bank, partially owned by the government, is not allowed to make any payments to shareholders until 2012. After that, however, the group is expected to become a generous dividend payer.

It is estimated that Lloyds raised £9bn more than it needed to exit the government funded Asset Protection Scheme (APS).

"The group is now in a position where essentially it is able to distribute more than its entire earnings while still improving its capital ratios", wrote the analysts.

Read a full report at the Daily Telegraph. ·