RBS, HBOS, Lloyds Get 37 Billion-Pounds from Government

Royal Bank of Scotland Group Plc, HBOS Plc, and Lloyds TSB Group will get an unprecedented 37 billion-pound ($64 billion) bailout from the U.K. as governments across Europe act to avert a banking collapse.

“We are going through quite extraordinary circumstances the world over,” Chancellor of the Exchequer Alistair Darling said on GMTV today. “It’s very, very important to the future not just of British banks, but working our way through with other governments what is a truly international problem.”

The U.S. Federal Reserve, European Central Bank and the Bank of England will offer financial institutions unlimited dollar funds for the first time in an attempt to ease tensions in money markets. European leaders agreed this weekend to guarantee new bank refinancing, and use government money to prevent lenders collapsing. Germany is preparing its own rescue plan that may total as much as 400 billion euros ($540 billion).

“They have no choice,” said Dirk Hoffmann-Becking, an analyst at Sanford C. Bernstein & Co. in London. “Paulson, Bernanke, Darling, Merkel, Sarkozy, Trichet & Co. will throw whatever they can at the problem until something sticks.”

RBS will get 20 billion pounds, while HBOS and Lloyds will raise 17 billion pounds between them, the companies said in separate statements today. Barclays Plc said it will try to raise more than 6.5 billion pounds without the government’s help.

The funding will allow the banks to boost their so-called Tier One capital ratio to more than 9 percent, the government said. In return for government money, the banks will be barred from paying executives cash bonuses. The government will also be able to appoint directors the banks and set dividends.

“The government is not a permanent investor in U.K. banks,” the Treasury said. “Its intention, over time, is to dispose of all the investments it is making as part of this scheme in an orderly way.”