Taxpayer stake in Lloyds cut to below 10%

THE government sold another 1 per cent stake in Lloyds Banking Group yesterday, bringing a total taxpayer holding that peaked at more than 40 per cent in the financial crash to under 10 per cent.

The taxpayer now owns less than 10% of Lloyds Banking Group. Picture: Jane Barlow

George Osborne hailed the development on the Chancellor’s Twitter account as “a big milestone” in returning the bank to the private sector and getting taxpayers’ money back.

Lloyds received a £20 billion taxpayer bailout after its ill-fated acquisition of HBOS, owner of Bank of Scotland and Halifax, at the height of the crash.

In further good news for the taxpayer yesterday, Britain’s “bad bank”, which is running down the loans of two other bailed out lenders, Northern Rock and Bradford & Bingley, disclosed that it had repaid £500 million to the government in the six months to September.

UK Asset Resolution (UKAR), a state-owned “zombie bank” that is closed to new business, said it had now returned £14.6bn, or 30 per cent, of the taxpayer loan to the government. UKAR said its interim underlying profit fell to £612m from £692.9m a year ago.

UK Financial Investments, which manages the government’s stakes in Lloyds and Royal Bank of Scotland, has now recouped £16bn of the state lifeline to Lloyds.

Earlier this month, the Treasury said that it would sell at least £2bn of Lloyds to small private investors next spring. By contrast, the drip-drip feed of stock bringing the government holding steadily down since last December has targeted institutional investors.