Royal Bank of Scotland Group plc, Lloyds TSB plc and HBOS plc, the three banks in which the government is proposing to take £9 billion ($15.6 billion) of preference shares, are asking the Treasury to revise the terms of its bailout plans, according to the Financial Times. They fear that the government's condition that they halt dividend payments to shareholders until the preference shares are bought back is driving down their shares prices, making it more likely the state will end up with large holdings in the banks by guaranteeing their fundraisings.
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However, the British Broadcasting Corp. reports that the government is likely to announce a clarification stating that a strict ban on dividend payments would only be in force for a year. Thereafter, the Treasury would use its discretion to permit dividend payments, depending on the banks' capital adequacy ratios.
The banks declined to comment. - Neil Sen
