The British government has taken advantage of recent share price strength and sold 721m Lloyds Banking Group shares. The share sale reduces the government’s stake in the lender to just under 8%. In total, the taxpayer owns a cool 5.7bn shares in Lloyds.
The government stepped in to save the lender from going under during the 2008/09 credit crunch, pumping in £23bn to take a 43% stake. Over a period of time, the government has reduced its stake, raising £17bn in the process.
Prior to the Brexit vote, which disrupted markets, the plan had been to offer the rump of the government’s shareholding to private investors, but the idea got dumped, in favor of selling the stake over a 12-month period to City institutions.
The decision was described as a “kick in the teeth” for private investors, but chancellor of the Exchequer, Philip Hammond, was unrepentant.
“Selling our shares in Lloyds Banking Group and making sure that we get back all the cash taxpayers injected into it during the financial crisis is one of my top priorities as chancellor,” said Hammond.
A spokesman for Lloyds said: “Today’s announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back.
“This reflects the hard work undertaken over the last five years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper.”
In its third-quarter results recently the bank revealed it set aside another £1bn to cover potential pay-outs relating to the mis-selling of payment protection insurance.