Lloyds share price subdued as taxpayer stake drops to below 5%

on Jan 30, 2017
Updated: Oct 21, 2019

Shares in Lloyds Banking Group (LON:LLOY) have retreated this morning, as the Treasury trimmed its stake in the bailed-out lender further. Following the latest sale, the government now holds less than five percent in the group, bailed out during the financial crisis.

As of 08:26 GMT, Lloyds’ share price had fallen 0.62 percent to 65.46p, largely in line with losses in the broader London market, with the benchmark FTSE 100 index currently 0.78 percent worse off at 7,128.47 points. The group’s shares have gained nearly five percent so far this year, but continue to trade below the taxpayer’s break-even price of 73.6p.
Lloyds announced in a statement to the London Stock Exchange this morning that the Treasury’s stake in the group had dropped to below five percent. The government, which was left with a 43-percent interest in the bank following a taxpayer-funded bailout during the financial crisis, has now recouped about £18.5 billion from its £20.5-billion investment.

Reuters noted in its coverage of the news that UK Financial Investments, the body which manages the government’s stake in Lloyds and bailed-out peer RBS (LON:RBS), is selling about one percent of shares on average about every three weeks, suggesting that at the current rate Lloyds should be fully returned to private ownership by around May.
The 21 analysts offering 12-month price targets for Lloyds for the Financial Times have a median target of 69.00p on the stock, with a high estimate of 93.00p and a low estimate of 40.00p. As of January 28, the consensus forecast amongst 26 polled investment analysts covering the bailed-out lender advises investors to hold their position in the company. Lloyds is scheduled to update investors on its full-year performance on February 22.
As of 09:01 GMT, Monday, 30 January, Lloyds Banking Group share price is 65.29p.

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