UK government sells £4.2bn stake in Lloyds

The UK government sold a £4.2 billion (€5 billion) stake in Lloyds Banking Group, its second disposal since rescuing the lender in the financial crisis.

The sale cuts the UK’s stake in Lloyds to less than 25 per cent from 33 per cent. “The sale has secured further value for the taxpayer and will be used to pay down the national debt,” the Treasury said in a statement.

“It is part of the government’s long term economic plan to build a stronger and safer banking sector.”

The disposal may be followed in coming months by the first offering of Lloyds shares to individual investors.

Lloyds chief executive officer Antonio Horta-Osorio said last month he will ask regulators in the second half for permission to restart dividend payments, the lender’s first since 2008.

The UK last sold a £3.2 billion holding, about 6 per cent of Britain’s biggest mortgage lender, to money managers in September. The shares were then sold for 75 pence each.

Lloyds has since climbed 2.3 per cent, making the stock the best-performing of Britain's five biggest banks. The lender advanced 0.8 per cent to 79.11 pence in London yesterday, above the 61 pence the government says it will break even after providing a 20 billion-pound rescue in 2008. Bank of America, JPMorgan Chase, Morgan Stanley and UBS managed the offering. Lazard acted as capital markets adviser.

The government has agreed not to sell any more shares for 90 days following the disposal.

The Treasury said in December it plans to give taxpayers the opportunity to purchase Lloyds shares “when the time is right” after a sale to money managers.

Bloomberg