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Lloyds Takes $18.2 Billion of Three-Year Money From ECB

Lloyds Banking Group Plc (LLOY), Britain’s second-biggest taxpayer-assisted lender, said that it took 11.4 billion pounds ($18.2 billion) of three-year loans from the European Central Bank at today’s auction.

“Lloyds can confirm it has drawn 11.4 billion pounds under the LTRO for an initial term of three years,” the London-based bank said in an e-mailed statement today. “The aim is to part fund a pool of non-core euro-denominated assets.”

Lloyds was one of 800 banks that took an unprecedented 529.5 billion euros ($712 billion) for 1,092 days from the Frankfurt-based central bank, topping the 489 billion euros handed out to 523 institutions in the previous operation in December. Lloyds didn’t take any funds from the ECB’s previous auction.

HSBC Holdings Plc (HSBA), Europe’s biggest bank, said this week that it would take about 350 million euros of loans at the auction after taking 5.2 billion euros previously. A Royal Bank of Scotland Group Plc (RBS) spokesman declined to comment on whether the bank had taken money from the ECB at its latest offering after borrowing 5 billion pounds last year.

The Longer Term Refinancing Operation is “offering relatively cheap funding,” RBS Finance Director Bruce Van Saun said at a press conference in London last week. “There is very little stigma around banks taking it in reasonable doses.”

The ECB is providing the banking system with cheap money in an effort to avert a credit crunch after the market for unsecured bank debt seized up last year and funding from U.S. money markets disappeared. Any bank in the region can borrow an unlimited amount, provided it pledges eligible collateral. Lenders won’t face curbs on bonuses or dividends, according to the ECB.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Steve Bailey at sbailey16@bloomberg.net

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