The UK government has sold further shares of Lloyds, raising £500m from the sale.
A further tranche of Lloyds Banking Group shares have been sold by the UK government as part of its plan to return ownership of the part-nationalised bank fully back to private investors.
The government took advantage of a recent jump in share prices to sell another one per cent of its stake for £500 million and lowering its overall ownership to 22.9 per cent.
"These sales are part of our plan to return Lloyds to the private sector and get taxpayers' money back," said Chancellor George Osborne in a statement. "The proceeds will be used to reduce the national debt."
In 2009 the government owned a 43 per cent stake in Lloyds, after pumping around £20 billion of taxpayer money into the beleaguered bank. However, since February, the British Treasury has been selling off shares to reduce the public’s ownership of the bank. To date, the government has recouped about £8.5 billion from the sales.
Sales of these shares has benefitted from the dramatic turnaround in Lloyds that has seen the bank achieve its first pre-tax profit since the state bailout in 2008. It’s no surprise then that the UK government is looking to make a profit from the recent leap in share prices.
Following the government’s announcement, Lloyds shares price retreated from its recent 12-month highs, but continue to trade just below. The plan to sell the government’s stake in Lloyds is due to be completed by the end of June.
Mr Osborne has also vowed to sell the public’s ownership of the Royal Bank of Scotland, where the government still owns 79 per cent of shares following a £45 billion bailout in 2008. However, no action will be taken until after the general election.
If Mr Osborne retains his role as Chancellor of the Exchequer, he has vowed to sell the government’s holding in Royal Bank of Scotland “as quickly as we can”.
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