Lloyds share offer success too late for C&G branches

09 June 2009 / by Rebecca Sargent
The success of the latest rights issue from Lloyds has come too late for a number of Cheltenham & Gloucester branches, reports today suggest.

As many as 1,500 jobs are on the line as Lloyds Banking Group has decided to close 164 of its Cheltenham & Gloucester branches, the BBC has reported, although it added that C&G's savings and mortgage arms will remain in business.

The news comes just a day after it was revealed that an attempt by Lloyds to raise cash to pay off the taxpayer was a success, as 87 per cent of shares were bought - Lloyds intends to use the money raised to swap some of the Government's £4billion worth of preference shares for ordinary shares.

Commenting on the success of the rights issue, which offered shares at a fraction of their current price, Graham Spooner, investment adviser at The Share Centre said:

"It comes as no surprise that the majority of Lloyds' shareholders accepted the bank's well executed offer. Last week we were advising the majority of our customers to take up the offer to avoid diluting their holdings and almost 70 per cent did."

However, Mr Spooner warned that the banking group's future remains uncertain: "Despite the successful offer, the future of Lloyds is still uncertain in the short term; Lloyds' decision to buy HBOS last year has undoubtedly hindered the bank's progress.

"However, we hope that after this period of volatility, this new and enlarged group will benefit from its viability on the high street and offer some long term value for investors," he added.

Speaking of the potential C&G branch closures, joint leader of trade union Unite, Derek Sampson, told Sky News: "Hundreds of staff, who have worked for years to make the Cheltenham & Gloucester brand a success, will view this news as a kick in the teeth.

"The UK taxpayers have not poured billions of pounds into this organisation just to see it sack thousands of hard working people," he added.

© Fair Investment Company Ltd