Lloyds returned to private hands as government sells stake

The government has sold off its last few shares in Lloyds Banking Group, meaning the bank has been fully returned to private ownership.

In a regulatory news update on Wednesday, Lloyds revealed that the government had sold the last 638,437,059 shares on the previous day.

This came almost a decade after the bank was bailed out in 2009 with a £20.3bn purchase of a 43% shareholding, and four years after the Treasury first began to sell down its stake.

Last month, Chancellor Philip Hammond confirmed the Treasury had recouped its initial stake in sales and dividends, but not the full cost of the bailout.

On Wednesday, analyst Laith Khalaf at Hargreaves Lansdown said the withdrawal of a large seller from the market should be positive for Lloyds' share price.

"It’s an interesting coincidence that one of the UK’s top fund managers, Neil Woodford, recently bought back into Lloyds after snubbing banks as uninvestable for fourteen years, just as the government is stepping out of the picture."

He noted that the taxpayer has only broken even on the face value of the Lloyds bailout, and is still nursing a loss if you factor in the borrowing costs associated with stumping up the money back in 2009.