Treasury rows back on plan to offer Lloyds shares to public

10 Oct 16

Government plans to offer shares in Lloyds Banking Group to the public have been scrapped after chancellor Philip Hammond said that ongoing market volatility means it is “not the right time for a retail offer”.

Publishing an update on the Treasury plan to sell the remaining 9.1% in the bank, which was bailed out in the financial crisis, Hammond said a sale plan, with shares offered to institutional investors, would ensure taxpayers gets back the £20.3bn investment made during the financial crisis.

A trading plan, which involves gradually selling shares in the market over time, has already reduced the government’s stake in the bank from a peak of around 40% during the 2008 financial crisis to 9.1% now. The stake is valued at around £3.6bn. The new plan will be in place for 12 months, and shares may start in the coming days.

Speaking in Washington on Friday, Hammond said that UK Financial Investments, which holds the investment in the bailed out banks, had advised that selling shares through the trading plan would represent good value for money.

“Returning Lloyds to the private sector is in the interests of the bank, taxpayers and the country as a whole. That is why exiting our stake in Lloyds in an orderly way and at the best possible price is one of my top priorities as chancellor,” he said.

Hammond’s predecessor George Osborne first announced plans for a retail offer to the public last December, which he said would allow people to buy a stake in the economy and help build a share-owning democracy

However, Hammond said that he would not offer the deal due to turbulence in the global market.

“Our plan will get back all the cash taxpayers invested in Lloyds during the financial crisis and leave the bank in a better place to continue the crucial role it plays in supporting individuals, families and businesses up and down the UK.”

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