Lloyds and RBS Look for €15 Billion from ECB

Lloyd's Banking Group (LBG) and the Royal Bank of Scotland (RBS), UK's leading part-nationalised banks, are reportedly planning to approach the European Central Bank (ECB) for a special three-year funding scheme. The combined amount to be requested is about €15 billion.

A report on FTAdviser said that the scheme in question - three-year Long-Term Refinancing Operation (LTRO) - was attractive because of a low 1 per cent interest rate. Incidentally, this is the same package that a number of the eurozone's other larger banks have asked for.

The Financial Times noted that the December LTRO auction resulted in £489 billion being raised by 523 banks. This time around, even by the most conservative estimates, there is expected to be £500 billion of demand.

"It might make sense for us to access the LTRO," said Antonio Horta-Osorio, Chief Executive for Lloyds, in the Financial Times report.

"The LTRO is offering relatively cheap money and there is very little stigma around taking it," Bruce van Saun, RBS' Finance Director, said in the same report.

While no details have been confirmed, Lloyds is expected to look for £10 billion of funding while the RBS (which took £5 billion in December) will probably take about the same amount this time around too.