Ian Gordon, a banks analyst at Investec Securities, said Lloyds’ decision to sell £170m of shares to cover the cost of the coupon payments “made no sense”, though he added that given the size of the sale it was not “a big deal”. “I am at a loss to explain it. [Lloyds’] capital position is exceedingly strong, but doing something like this throws an unnecessary cloak of suspicion over their numbers,” he said. Lloyds had been barred by the European Commission from making coupon payments on certain bonds as part of a state-aid deal following the bank’s rescue by the Government in late 2008. A spokesman for Lloyds said the issue of new shares to meet the cost was intended to be “capital neutral”, meaning it will not have any impact on the bank’s core Tier 1 ratio – its “buffer” of capital. One analyst, who asked not to be named, said the driver behind the share sale could be the Financial Services Authority. In the wake of the financial crisis, regulators have pushed banks to raise their capital levels and ensure they take steps to preserve their financial strength.