Lloyds confirms APS renegotiation talks

18th Sep 2009 07:04

Part-nationalised bank Lloyds Banking Group has confirmed it is in talks with the government about changes to the terms of its possible participation in the government asset protection scheme (GAPS).‘In light of improving economic conditions and the results of Lloyds' detailed reviews of its loan portfolios and their expected performance, Lloyds and HM Treasury are discussing possible changes to the commercial terms on which Lloyds might enter into GAPS from those announced in March 2009, including the possibility of reducing the amount of assets covered by the scheme,’ the company said in a statement.Lloyds is also mulling possible alternatives to participation in the scheme. These options are being discussed with HM Treasury, UK Financial Investments and the Financial Services Authority.‘All possibilities remain open and, as part of this process, Lloyds is focused on ensuring that any potential alternatives to GAPS would be in the interests of shareholders and other stakeholders,’ the company statement said.The statement came on the day that the Daily Telegraph reported that the bank had been forced to abandon its plan to withdraw from the government's toxic debt insurance scheme after failing to raise enough capital to meet the Financial Services Authority's strict requirements.