Hedge fund bets nearly £1bn against UK banks

Billionaire US hedge fund manager John Paulson has made a near £1bn bet against four British banking stocks.

The FSA’s short-selling ban has forced Paulson to disclose large positions in RBS, Lloyds TSB, Barclays and HBOS.

Paulson’s $35bn hedge fund, which amassed stellar returns betting against sub-prime mortgages last year, was one of only a handful of vehicles to retain short positions past Friday's deadline.

The Paulson & Co fund disclosed four UK bank shorts:

• 1.76% in Lloyds TSB
• 1.18% in Barclays
• 0.95% in HBOS
• 0.87% in Royal Bank of Scotland

It is estimated the combined bets are worth in excess of £900m.

In a statement released last night, Paulson & Co says it “empathises” with the difficulties financial firms currently face.

“We support the FSA's desire to establish fair trading practices and to eliminate fraud and market manipulation,” it reads.

“We will continue to comply with the FSA's requirements.”

Contact:
Hysni Kaso
0207 484 9793
Hysni.Kaso@incisivemedia.com