Shares in Lloyds Banking Group (LON:LLOY) have gained ground in London this morning, as the Treasury returned the blue-chip lender to full private ownership. The move marks a milestone for Lloyds which was rescued by the UK government during the financial crisis with a £20.3-billion bailout, leaving the taxpayer with a 43-percent holding in the bank.
As of 08:23 BST, Lloyds’ share price had added 0.83 percent to 70.73p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.07 percent lower at 7,516.81 points. The group’s shares, however, remain below the taxpayer’s break-even price of 73.6p.
Lloyds disclosed in a regulatory filing this morning that the government was no longer a shareholder in the bank, having sold the remainder of its stake in the lender. The Treasury confirmed in a separate statement that it had ended the trading plan which had seen it offload shares in Lloyds to institutional investors at a steady pace.
The government acquired a 43-percent shareholding in Lloyds in 2009 following a £20.3-billion rescue. Shares were subsequently sold through accelerated bookbuilds in September 2013 and March 2014, as well as through two trading plans which ran from December 2014 to June 2016, and from October 2016 to May 2017. While former Chancellor of the Exchequer George Osborne had promised to offload part of the shares via a retail sale, the ‘Tell Sid’-style plan was subsequently scrapped by the new government amid market volatility and a drop in Lloyds’ share price following Britain’s decision to leave the European Union.
The FTSE 100 bank noted today that it had returned more than £22.2 billion to the British taxpayer, repaying £894 million more than the original investment.
The Times noted in its coverage of the news that while Lloyds’ return to private ownership was unlikely to lead to a change of direction for the UK’s biggest high street bank, it would throw up fresh questions about the leadership and its current chief executive António Horta-Osório who is seen as a potential candidate for other banking roles including the top job at HSBC (LON:HSBA).