Government sells additional stakes in Lloyds

The UK government has sold one per cent of its stake in the Lloyds Banking Group, bringing government ownership of the bailed-out bank to less than 13 per cent.

At the peak of the financial crisis, Lloyds needed £20.5 billion of taxpayer money to avoid collapse. The bailout left the government with a 43 per cent stake in the company.

In 2013, the Treasury started selling its stake in Lloyds and has been slowly releasing shares into the market via a trading plan. According to UK Financial Investments, which manages the government's stakes in Lloyds and Royal Bank of Scotland, the most recent sale has reduced the government's holding of the bank to just 12.97 per cent.

This most recent sale also brings the total recovered by taxpayers to £14.5 billion.

Sale hoped to be complete by end of the year

Chancellor George Osborne explained that he is determined to keep sales of Lloyds shares going, as this brings the stakes back to the private sector and puts money back into the country.

"I am determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt," he said.

He reiterated this comment with a tweet: "Delighted that we continue to get taxpayers' money back through Lloyds share sales, taking total now to £14.5 billion."

According to Reuters, Mr Osborne also said that he wants the government out of the UK banking system.

"I hope that [the sale of Lloyds] will be complete within the year," he said.

A spokesman for Lloyds said: "Today's announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back."

Sale of shares in the Royal Bank of Scotland will take longer, however. Earlier in August, the chancellor ordered the first sale of government shares in RBS – but at a loss of around £1 billion.

This morning (August 24th), shares in Lloyds bank opened down around 3.5 per cent at 73.11p.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.