The Treasury has cut its stake in Lloyds Banking Group Plc by one percentage point, Britains finance ministry said in a stock market disclosure on Tuesday, netting a total of £11.5 billion recovered by the taxpayer.
The latest sale of government-owned shares in the lender brought back £639 million, reducing the states holding in Lloyds to 16.87% from an initial stake of 41%. Lloyds was bailed out during the 2007-2009 financial crisis at the cost of £22.5 billion to the taxpayer.
“Todays announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back,” a Lloyds spokesman said in a statement. “This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper.”
UK Financial Investments, the body responsible for handling the governments stakes in the privatized banks, has been gradually cashing in on rising investor interest toward the biggest British retail bank, having started the sell-off in 2013. The Treasurys stake in Lloyds has fallen from 24.9% at the start of a “trading plan”, initiated by UKFI in December 2014, under which government-owned shares in the lender have been sold to big institutional investors.
The plan was due to this month but the Treasury extended it through December 31st, saying that the additional six months would help meet Chancellor George Osbornes pledge to divest the governments entire stake in Lloyds and return the bank entirely to the private sector over the coming year. This is also expected to include the possibility for retail investors to participate in an offering of several billion pounds worth of Lloyds shares, possibly this year.
The government is also planning to begin divesting its 79% holding in Royal Bank of Scotland, which was bailed out during the crisis along with Lloyds.
Lloyds Banking Group Plc slid 0.61% to GBX 86.55 per share by 09:29 GMT in London, marking a one-year jump of 14.71%. The lender is valued at £62.22 billion based on Mondays close. According to the Financial Times, the 25 analysts offering 12-month price targets for Lloyds Banking Group have a median target of GBX 95.00, with a high estimate of GBX 110.00 and a low estimate of GBX 55.00. The median estimate represents a 9.10% increase from the previous close of GBX 87.08.
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