UK banks set to unveil bailout plans: sources

By Ralph Gowling and Steve Slater

LONDON (Reuters) - Major British banks are expected to announce plans to recapitalize early on Monday, people familiar with the matter said, which could see the government take multibillion pound stakes in several lenders.

Banks could receive about 37 billion pounds ($64 billion) in government funds to boost their capital, according to one person familiar with the matter and other media reports.

Crisis talks among the banks, government and regulators continued late on Sunday to determine how much capital each needs from the 50 billion pounds offered by Britain last week.

An announcement is expected before the market opens on Monday, but details are still being fine-tuned, said the sources, who declined to be identified.

Royal Bank of Scotland Group Plc (RBS.L) could boost capital by 15 billion pounds, HBOS Plc HBOS.L could take in 10 billion, Barclays Plc (BARC.L) could seek 7 billion and Lloyds TSB Group Plc (LLOY.L) about 5 billion, according to a source and several media reports.

Banks are expected to try to sell shares to existing investors, backed by the government, which would buy the shares not taken by investors.

That could result in the government becoming the biggest shareholder -- and even a majority investor -- in RBS and

HBOS.

RBS chief executive Fred Goodwin is widely expected to resign as part of the fund-raising. Earlier this year RBS shareholders had said Goodwin would need to step down if the bank sought to raise more cash. Stephen Hester, chief executive for British Land Co Plc (BLND.L), is seen taking over after joining the RBS board just 11 days ago.

In addition to potentially taking ordinary shares, the government is expected to provide capital in return for preference shares, which could pay an annual dividend of about 10 percent but typically do not have voting rights.

Other European countries also prepared to step in to help ailing banks, and leaders met in Paris on Sunday to discuss options, racing to throw banks a lifeline before markets reopen.

SEATS ON BOARDS

The government could take seats on the boards of banks, a government source said on Saturday.

Lloyds, RBS, HBOS and Barclays all declined to comment.

Lloyds is in the process of buying HBOS, and the fund-raising could see Lloyds renegotiate the terms of the deal, especially if the government ended up with a sizable stake.