Lloyds launches record-breaking rights issue - papers

Lloyds Banking Group has launched a record-breaking £13.5bn rights issue at a near-40% discount as part of a massive fund raising to strengthen its balance sheet, reports The Telegraph.

The bank has priced Britain's biggest ever cash call at 37p a share, a 38.7% discount to the theoretical ex-rights price based on last night's closing price of 91.47p.

Lloyds is offering shareholders 1.34 new shares for each ordinary share held. The 36.5bn new shares being issued represent 57.3% of the enlarged share capital.

The rights issue is part of a total £22.5bn capital raising undertaken by the bank that was brought to its knees by the acquisition of HBOS.

Raising the fresh capital will enable Lloyds to escape the pricey government-backed insurance scheme for bad debts - known as the Asset Protection Scheme. Read more 

The Times reports that Britain's economy is lagging well behind other leading industrialised countries.

Figures from the Organisation for Economic Co-operation and Development (OECD) showed that while the UK remained in recession between July and September, the other leading seven economies expanded.

The 30 nations under the OECD umbrella also averaged economic growth of 0.8% in the third quarter.

Official preliminary estimates of UK GDP published last month showed that the economy shrank by 0.4% between July and September. Read more

A study by ratings agency Standard & Poor's has raised questions over the financial strength of some of the biggest banks ahead of new rules that could require them to raise more funds, reports the Financial Times.

The analysis shows HSBC is the best capitalised bank in the world, while Switzerland's UBS, Citigroup of the US and several of Japan's biggest banks are among the weakest.

The ranking of 45 of the world's leading banks will unnerve investors, highlighting once again the capital shortfall that institutions still need to make up over the coming years. Read more