Osborne plans public share offer to complete Lloyds privatisation

4 Dec 15

George Osborne has extended a government scheme to sell shares in Lloyds Banking Group as part of moves to fully privatise the firm, which was bailed out during the financial crisis.

The chancellor first approved a trading plan to sell the taxpayer stake in the bailed-out bank last December, when an initial six-month scheme for UK Financial Investments to sell shares when market conditions were right was agreed.

Subsequent extensions have seen the UK government’s stake in Lloyds reduced to around 9%, down from down from a peak of around 40% during the financial crisis of 2008.

The sale plan will now reduce the holding to a level where the government can fully privatise the bank through a share offer to the general public.

“The trading plan has been a huge success, with over £9bn raised for the taxpayer so far. This means we have now recovered over £16bn in total, and we now own 9.2% of the bank,” Osborne said. “I’m today extending the plan to build on this success and recover further money for the taxpayer.

“As part of my plan to fully return Lloyds to the private sector, reduce public debt and build a stronger and safer financial system, Lloyds shares will also be offered to retail investors in spring 2016. This will allow hardworking people to buy a stake in our economy and help to build a share-owning democracy.”

Shares disposed of through the trading plan have been sold for around 81p on average, comfortably above the 73.6p average price originally paid. Shares will not be sold for less than the price paid for them, and the trading plan is now scheduled to end on 30 June.

Osborne has separately approved sales of the government stake in the Royal Bank of Scotland, which was also bailed out in the financial crisis. The first sale of RBS shares in August raised £2.1bn. In contrast to the Lloyds sale, that initial tranche of RBS shares was sold for around one third less than the government had paid at the height of the banking crisis.

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