LONDON, March 7 (UPI) -- The British government says it is increasing its stake in Lloyds Banking Group from 43 percent to 63 percent, giving it control of the company.
Treasury Minister Stephen Timms told the BBC the deal means the banking group will be mandated to hand out $20 billion in lending this year, of which $15 billion would go to companies and $4.2 billion for home mortgages.
"It's a very important announcement," Timms said. "It provides new certainty for Lloyds enabling it to commit new lending into the economy."
The deal to give the government a bigger stake was reached Friday night, with taxpayers also providing a fresh injection of equity into Lloyds to prop up its balance sheet, The Daily Telegraph reported.
The government will provide the new equity through the purchase of "B shares," which it could later convert into ordinary equity that could boost its voting rights in Lloyds to 75 percent, the newspaper said.
As part of the move, Lloyds will put about $366 billion of impaired assets -- most of which were acquired with last year's purchase of HBOS PLC -- into the government's scheme for toxic insurance assets, the Telegraph said.
