George Osborne has taken advantage of the post-election market rally to sell more shares in Lloyds Banking Group, cutting the UK government’s stake to below 20 per cent.
The Chancellor’s latest disposal of around 1 per cent of the lender represents shares worth in the region of £500 million and means the Treasury has now recouped more than half of the £20 billion in bailout funds committed in 2009.
Former Bank of England economist Mark Taylor, dean of Warwick Business School, said: “At this rate taxpayers are on course to get all of their money back. In fact, with Lloyds offering such an improved financial performance, there is a likelihood of a stronger share price so that there may even be a profit for the taxpayer on the sale of the remaining 20 per cent government stake.”
Earlier this month, Lloyds posted a 21 per cent jump in underlying pre-tax profits to £2.2bn for the first quarter, and the lender is due to start paying out dividends to shareholders later this year.
The government has reduced its stake in Lloyds by 5 per cent in the past three months, raising about £2.5bn as part of a trading plan launched in December.
Osborne wants a further £9bn of shares to be sold over the next 12 months, including about £4bn through a discounted offer to retail investors.
He said: “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.”
No shares have been sold below the 73.6p price the government paid for them. Lloyds closed at 87.02p yesterday.
The lender, led by Antonio Horta-Osorio, said the latest sale “shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back”.
The Bank of Scotland parent added: “This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank.”