You can lead a horse to water, but you can’t make him drink. Lloyds Banking Group is hell-bent on avoiding the UK government’s bad bank if it can. Atrocious markets in March forced it to agree to inject £260bn of dodgy loans into the government’s asset protection scheme. Since then, all kinds of other possibilities have been bandied around, yet it was only on Friday that the bank formally broke its silence. But Lloyds only said it was still negotiating its participation in the scheme, while considering “possible alternatives”. The latter is code for a rights issue, share placing, asset sale or, indeed, all three.

Eric Daniels, chief executive, has good reason to look around. For one, European Union restrictions on state aid could still force Lloyds to sell banking assets such as Halifax or Cheltenham & Gloucester. Second, the APS is not cheap. Lloyds would have to pay the government almost £16bn for the protection in the form of non-voting shares, so increasing Whitehall’s stake from 43.5 per cent to almost 65 per cent. Mr Daniels wants to keep the state interest below 50 per cent. Pro rata, that would mean injecting just £80bn into the insurance scheme, yet the fee on that would still be £5bn.