Lloyds Banking Group is regarded as one of the foremost groups of financial service that render its valuable services particularly in the UK. The group delivers its different services especially to personal and corporate customers. Lloyds was renamed in January 2009 after Lloyds TSB acquired HBOS, one of the banking and insurance companies of the UK, with a vision to become the best bank in the UK as compared to others. The group is viewed to be the largest retail bank operating in the UK with leading edge in many sectors in comparison with other banks prevailing in the UK. The group possess multiple brands that are served to its valuable customers which ultimately makes the group to enhance its productivity by a considerable level and accomplish significant competitive position over its chief business market competitors (Lloyds banking Group, 2012).
This paper intends to critically analyse and assess the different sources of long-term finance that are currently used by Lloyds concerning a detailed discussion about the advantages as well as the disadvantages of each identified source supported with suitable calculations. Moreover, the paper also evaluates the approaches related with planning, control, performance management and financial decision making of the selected organisation.
Various aspects such as evaluating the role of the Management Accountant in Lloyds and recognising a particular analytical technique that is used by this organisation that helps the organisation to make effective planning and decision-making among others will also be portrayed in this paper. Question 1 Identification and Assessment of long-term finance sources Used by Lloyds Banking Group Lloyds identify funding to be a key area of focus for its successful business performance. The group raises its long-term finance through executing various sources that include equity capital, customer deposits, wholesale funding and debt financing (Michigan Economic Development Corporation, 2009). The Advantages and Disadvantages of Each Source, Supported With Relevant Calculations Equity Capital The most important source of raising long-term funds for the financial institutions is the issue of equity shares. It has been apparently observed that Lloyds considers the issuance of equity shares as a permanent source of finance for them. This is owing to the fact that the issuance of equity capital has increased the group’s financial base as well increased its borrowing ability by a significant level. Being a financial institution, there might lay a probable chance of rising significant threat concerning that the issue of equity shares may reduce the ownership control of the existing shareholders and dividends payment can be reduced at large. In this similar context, the group strongly believed that the source i.e. issuance of equity shares would support it to mitigate the aforesaid threats (Michigan Economic Development Corporation, 2009). Customer/Public Deposits Customer or public deposits are also regarded as another important source of long-term finance for Lloyds. According to the group, customer or public