British govt could own 30% of biggest lenders

The British government may own as much as 30 percent of four of the country's biggest banks as it doles out the 50 billion-pound lifeline announced on Wednesday, according to analysts at Sanford C. Bernstein Ltd.

Prime Minister Gordon Brown and Chancellor of the Exchequer Alastair Darling offered to buy preference shares to help boost capital at Royal Bank of Scotland Group Plc, Barclays Plc, Lloyds TSB Group Plc, HBOS Plc and four other lenders in the unprecedented rescue plan. It also guarantees about 250 billion pounds of loans and increases the amount the Bank of England makes available to at least 200 billion pounds.

"The proposed injection leaves the UK banks in a strong solvency position," London-based Bernstein analysts including Bruno Paulson wrote in a note to clients yesterday. "The downside is of course that the capital raising implies dilution, with the government potentially taking 20-30 percent of the banks."