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Lloyds in rights issue setback

THE government is preparing to tell Lloyds Banking Group it will not underwrite the bank&rsquo;s planned rights issue, designed to help it exit the Asset Protection Scheme (APS).<br /><br />While the government &ndash; which owns 43.5 per cent of Lloyds &ndash; is expected to take part in the cash call, Treasury officials are understood to have told the bank that it will not underwrite the issue.<br /><br />The decision will make it harder for Lloyds to drum up support for the fundraising, although it is thought to have the support of several investment banks.<br />