Government sells £4.2bn stake in Lloyds
Chancellor George Osborne said yesterday’s sale “represents good value for the taxpayer” and the proceeds would be used to reduce the national debt.
“It is another step in repairing the banks, in reducing our national debt and in getting the taxpayers’ money back,” Mr Osborne said.
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Hide AdTaxpayers stand to make a slim profit on the £20bn pumped in to rescue Lloyds in 2009, which analysts and bankers said should encourage the Government to speed up its exit. The owner of the Halifax brand is a major employer in Yorkshire.
Banking sources have said another sizeable sale is expected this summer or autumn and a full exit is possible before the general election in May 2015.
“Ideally, they want to be out before the next election but a lot depends on market conditions,” said Gary Greenwood, analyst at Shore Capital.
The next sale is expected to include an offer to retail investors, which sources familiar with the matter said will be easier to do once there is greater clarity over the prospects for Lloyds resuming dividend payments.
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Hide AdUK Financial Investments sold a 7.8 per cent stake in Lloyds, or 5.6bn shares, at 75.5 pence a share. The sale is a vindication for chief executive Antonio Horta-Osorio, who has restored the bank to profitability since his appointment in 2011, simplifying the business to focus on lending to UK households and businesses.
“Lloyds has done the bulk of the hard restructuring work and in terms of looking like a normal bank, it is pretty much there and that’s reflected in the performance of the shares over the last 18 months and the valuation it’s on,” Mr Greenwood said.
The reprivatisation of RBS is reckoned to be further away.