Government sells down Lloyds Bank stake below 6pc
The UK government announced on Monday that its stake in Lloyds Banking Group fell below 6% after it sold 700m shares late on Friday.
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UK Financial Investments Limited, the government vehicle set up to control taxpayers' stakes in the banks bailed out during the credit crunch in 2008, now holds a 5.95% stake in Lloyds, down from 43% at its peak.
Helped by dividends received from the bank amounting to £318m, government has recovered over £18bn of the £20.3bn injected into Lloyds during the financial crisis.
In May, the government said it planned a retail sale of its 9.2% shareholding, fully returning the shares to the private sector between 2016 and 2017.
But in October, Chancellor Philip Hammond announced the government would only make shares available to institutions rather than retail investors.
Following Monday's sale, the government is now only the second largest shareholder, with Blackrock now top of the register.
On Monday, Hammond said: "Returning Lloyds to the private sector and recovering all of the cash the taxpayer injected into the bank during the financial crisis is a priority for the government."
He did not give any further detail on plans for returning the remaining stake of around £2bn.
Analyst Joshua Mahoney at IG said the sale was good news for Lloyds but mixed for the government: "There is a feeling that having the government breathing down your neck is something which limits investment decisions and encourages a risk-averse mindset for the firm.
"Amid a wider back drop of rising inflation, there is a feeling that perhaps the government sold a little early, as the bank is yet to benefit from the boost that will come once interest rates rise."