January 19, 2009 / 10:48 PM / 11 years ago

Lloyds Bank chairman says doesn't want government to raise stake

LONDON (Reuters) - Lloyds Banking Group is happy to have the government as a shareholder but does not want the state to own any more of the bank, Chairman Victor Blank said on Monday.

Lloyds TSB Chairman Victor Blank speaks to reporters after a news conference in the City of London, September 18, 2008. REUTERS/Luke MacGregor

“I think we can probably conduct our business better than the government can conduct it for us,” Blank said in an interview with Sky News.

The government threw its troubled banks a second multi-billion pound lifeline in three months on Monday, the day that Lloyds TSB completed its takeover of mortgage lender HBOS to create Lloyds Banking Group.

Shares in the new company closed a third lower as the scheme failed to reassure investors.

The government has a 43 percent stake in the new group after underwriting capital raisings by Lloyds TSB and HBOS as part of an earlier 37 billion pound bailout of the banking sector.

“The reason why we are at 43 percent and we don’t want to go any higher is that we believe that that is better for our customers ... better for our staff ... and we believe that in time it will be better for our shareholders,” he said.

“We are happy to see it (the government) there but with less than 50 percent,” he added.

He said he believed the government’s rescue package on Monday will make “a significant difference.”

“I don’t think it’s a bailout, but I think it will do an awful lot to fix it,” he said.

Asked about the disclosure of so-called “toxic debts,” Blank said: “I believe everything is out there as far as HBOS is concerned. They have made three or four statements over the course of the last year explaining exactly what their financial position is.”

He still believed Lloyds’ takeover of HBOS was a good deal. “This deal will prove to be an extremely good one for Lloyds TSB, now Lloyds Banking Group,” he said.

Blank said banks had made mistakes but he did not accept they had wrecked Britain’s finances.

Reporting by Frank Prenesti, Adrian Croft;

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