Lloyds may opt out of costly APS

LLOYDS Banking Group is considering pulling out of the government&rsquo;s asset protection scheme (APS) and opting for an independent capital raising instead, City A.M. understands.<br /><br />A Lloyds board member said the company had not &ldquo;ruled anything in, or ruled anything out&rdquo;.<br /><br />Shares in the bank yesterday rose 12.3 per cent to 104.7p on the back of an analyst&rsquo;s note suggesting that Lloyds would not have to put as many assets into the scheme as originally thought.<br /><br />Deutsche Bank&rsquo;s James Napier said the high cost of the scheme meant Lloyds could bolster its &ldquo;capital ratios independent of government&rdquo;.<br /><br />When the government first announced the scheme in March, Lloyds was in meltdown and its shares traded at just 42p, meaning that it was forced to consider the APS even though that meant losing its independence by handing over a majority stake to the government.<br /><br />Now that its shares have more than doubled, City analysts believe that the Bank, which is currently 42 per cent state owned, could mount a fundraising of its own to bolster its capital ratios.