Lloyds share price in focus as Treasury extends trading plan

The UK government is extending the sale of the taxpayer’s stake in bailed-out Lloyds Banking Group (LON:LLOY), paving the way for a ‘Tell Sid’-style share offer. The extension comes with the current scheme, which has seen the Treasury drip-feed Lloyds shares into the market, due to expire at the end of the month.

Investors have reacted positively to the news, with Lloyds’ share price having added 0.50 percent to 88.21p as of 08:01 BST. The shares have gained just under 14 percent over the past year.
UK Financial Investments (UKFI), the body which manages the government’s holdings in Lloyds and bailed-out peer Royal Bank of Scotland Group Plc (LON:RBS), announced in a statement this morning that it intended to continue selling part of the Treasury’s holding in Lloyds in the coming months, extending the pre-arranged trading plan originally announced in December last year. The UKFI noted that following the extension, the trading plan would terminate no later than the end of the year.
The Sunday Times yesterday quoted City sources as saying that the extension of the trading plan was a “no-brainer” for the government, which wants to offload its holding in both Lloyds and RBS as quickly as possible.
Separately, Lloyds announced in a statement that the Treasury had offloaded a further one percent of shares in the bank, bringing its stake to just below 19 percent. The government has now recovered over £10.5 billion of its investment in the bank.
Once the trading plan is completed, it is expected that about £4 billion worth of shares will be sold through a discounted retail offer to the public. The UK government said today that it would launch a retail share sale in the next 12 months, while one well-placed source told the Sunday Times that the move could come as early as September.
As of 19:25 BST, Monday, 01 June, Lloyds Banking Group share price is 88.66p.