Lloyds aiming for recovery

<!--StartFragment--> LLOYDS Banking Group made a tentative step towards recovery yesterday as it launched a discounted &pound;4bn share placing, just a day after chairman Sir Victor Blank announced his retirement.<br /><br />In a move that signals a fresh start after the Blank regime left the bank 43 per cent state-owned, Lloyds said it would use the cash call to repay the preference shares held by the government.<br /><br />Shareholders are being offered 0.6213 shares for every share they own at 38.43p, a 57 per cent discount on Friday&rsquo;s closing price, likely to prove attractive to institutions. Any shares not taken up will be sold into the market and profits returned to shareholders, with the government acting as underwriter.<br /><br />If the offer is fully subscribed, as expected, the government&rsquo;s stake will remain at 43 per cent, but if the shares are rejected, its stake would rise to 65 per cent.<br /><br />Paying back the preference shares would save the bank &pound;480m a year in dividend payments to the Treasury, strengthening its capital base. Combined with its participation in the asset protection scheme, the bank expects its core tier 1 ratio to reach 14.5 per cent.<br /><br />The cash call follows Sunday&rsquo;s announcement that Sir Victor Blank would be standing down as chairman. New trade minister Mervyn Davies and Lloyds&rsquo; new deputy chairman Lord Leitch are among the favourites to succeed him. <!--EndFragment-->