Lloyds Rights Issue

Maybe you saw that Lloyds is embarking on a £13.5bn Rights Issue. If you already own Lloyds shares you will be given the option to buy 1.34 new Ordinary shares for every 1 you hold, at 37 pence each.  One might expect that Lloyds would be looking for additional funds after the HBoS take-over that was encouraged by the UK government.  It has since then emerged that the value of HBoS was inflated by a secret loan made by the Government and also that apparently Lloyds chief executive and the former chairman both knew about the secret arrangement. This was not disclosed to the investors during the time of persuading that a take-over of HBoS would be a good idea. With this loan, and another such secret loan made by the Government to RBS, having been repaid early this year it is not surprising that funds are low. No, I’m not going to refer to bonuses again…

My MBA class is now busy with the Integrative Project that sees them competing against each other in a virtual market – lots of hectic decision-making and, dare I say, a bit of industrial espionage taking place! After that we have a week of revision before the exams. And then, before we know it, it is time to pack our bags and set off for the Christmas break.

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The World has changed

For many Scots the World will be a different place if Bank of Scotland, set up by an Act of Parliament in 1695, ceases to exist.  This is more than likely with Lloyds TSB’s expected take-over.  It is reported that some sort of merger has been discussed over the year but it is of course the raid on HBoS shares that has prompted this now and let’s face it: a take-over is VERY different from a merger.  Otherwise, HBoS might well have suffered the same destiny as Lehman.  The Chancellor mentions on BBC News that they “were on to their problems for several week” but what is the nature of these problems exactly?  Are we talking real poor business practice issues or are we seeing the effects of speculators seeking a quick win?  Reputation is so important in the world of finance, even more so than in the past, but if someone decides to destroy that then this can be the road to a quick exit.

Closer to home, I’m still enjoying the arrival of “my” new MBA class.  Earlier today I hosted the Partners Reception during which I gave a brief presentation to the MBA husbands and wives so that they would know what to expect in the year to come.  For me personally it is important to meet the families of the students but I think the partners also enjoy meeting other people in the “same boat” so to say.  We’ve had the first Careers input today and tomorrow we will conclude Induction Week with our Innovation Event and the ceilidh.