UK sells more Lloyds shares, has raised over £10bn

Britain has sold another £500 million worth of shares in Lloyds Banking Group and has now raised more than £10 billion through the sale of more than half its stake in the bailed-out bank.

The Treasury said on Tuesday that it had reduced its stake by a further 1 percentage point to 19.93 per cent, days after a surprise election triumph for the Conservatives sent the bank’s shares soaring to multi-year highs.

Lloyds was rescued during the 2007-9 financial crisis at a cost of £20 billion pounds to taxpayers, leaving Britain with a 41 per cent stake.

UK Financial Investments (UKFI), which manages the shareholding, began selling Lloyds shares to institutional investors such as pension funds and insurers in September 2013.

Chancellor of the Exchequer George Osborne has said the government plans to sell at least another £9 billion worth of the shares over the next year, including a sale at a discount to private retail investors.

“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,” Mr Osborne said on Tuesday.

The latest sale was through a "pre-arranged trading plan", which UKFI appointed US investment bank Morgan Stanley to undertake. The government's stake has been cut from 24.9 per cent through the plan, which was launched last December, raising over £2.5 billion for taxpayers.

Britain’s remaining stake in Lloyds is valued at about £12 billion, based on current share prices.

Mr Osborne is expected to press ahead with a plan to sell Lloyds shares to private investors later this year and the government could sell around £4 billion worth of stock through a retail offer, sources said.

The government has said the retail offer would be sold at a 5 per cent discount to market value. Investors would be able to buy between £250 and £10,000 worth of Lloyds shares, with priority going to orders of up to £1,000.

The government is also considering a sale of its shares in Royal Bank of Scotland later this year and could begin selling the shares at a loss, sources told Reuters last week.

It is currently sitting on a loss of more than £13 billion on its RBS investment.

Reuters