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Bank shares tumble on news of Asset Protection Scheme

Banking shares have taken a hit this morning as the repercussions of the government’s Asset Protection Scheme begin to take effect.

Barclays’ share price has dropped 11% to 57.5p following weekend reports that the bank will be the next to follow Royal Bank of Scotland and Lloyds Banking Group into the scheme.

Lloyds Banking Group shares opened at 36p, significantly down on Friday’s closing share price of 42p as details began to emerge of the bank’s involvement in the scheme.

Its shares have since gained some ground but are still low at 38p.

HSBC, which announced a £12.5bn rights issue last week, has fallen 9% but its price continues to compare favourably to its rivals at 328p a share.

Shares in Royal Bank of Scotland, the first bank to participate in the government’s Asset Protection Scheme, have also tumbled by 8% to just 18p.

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