The UK government seems intent on charging Lloyds Banking Group a steep arrangement fee for entering into its asset protection scheme. The Treasury, looking to fill a deficit of £175bn, may be eyeing as much as £2bn, according to Bloomberg.

This would be in return for the backstop support Lloyds enjoyed from the government insurance programme, into which the hobbled Black Horse on March 7 agreed in principle to offload £260bn of its copious dud loans. The scheme has not yet entered into effect but has helped create the conditions for a recovery. Lloyds’ shares, which dipped to a low of 30p on March 5, have since trebled. It wants to take advantage of improved market conditions to raise fresh equity and scale down its participation in the APS, which came with a £15.6bn price tag in the form of non-voting B shares, perhaps even withdrawing altogether.