Treasury sells £500m of Lloyds shares, putting taxpayer stake below 20%

12th May 2015


The Treasury has sold a further tranche of shares in Lloyds Banking Group, taking the taxpayer stake to below 20%.

The sale has generated £500m for the Government and brings the total that has been returned to taxpayers to around £10bn.

The group received Government aid of £20bn during the financial crisis, as the state bought a 40% stake in the bank.

The Government’s shareholding has reduced by 5% since the start of 2015 and is now at 19.93%

UK Financial Investments is tasked with managing the Treasury’s ownership of stakes in banks and building societies that needed help during the crisis.

The Treasury says that all shares sold have been above the average price paid for them, which was 73.6p.

The Chancellor of the Exchequer, George Osborne, says: “I’m delighted that we’ve now raised over £10 billion from selling our shares in Lloyds Bank. This means we have recovered over half of the taxpayers’ money put into Lloyds, and now own less than 20% of the bank.

“These sales have only been made possible by our long term economic plan, and we are determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt.”

A trading plan involves gradually selling shares in the market over time. It launched on 17 December 2014 and will end no later than 30 June. Over £2.5 billion has been raised for the taxpayer through the trading plan so far.

At the 2015 Budget the Chancellor announced that the government will sell at least £9 billion of Lloyds shares in 2015/16.

Shares in Lloyds Banking Group remained broadly flat in early trading at around 87.7p.

Royal Bank of Scotland, was also rescued by taxpayers in the crisis, but remains 80% Government owned.

It recently posted losses of £446m for the three months to the end of March as it made provisions of £85m for litigation and £453m for restructuring  after selling US bank Citizens.

In February, Lloyds promised to resume paying dividends for the first time since the crisis, the BBC reports, as it posted full-year statutory profits of £1.8bn.

Lloyds said it would pay a dividend of 0.75 pence per share, totalling £535mdivided between bank’s three million shareholders, £130m of which would go to the Government.

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