Business

Government sells more Lloyds shares

A man walks past a Lloyds bank branch Image copyright European Photopress Agency

The government has sold another tranche of shares in taxpayer-backed Lloyds Banking Group, reducing its stake in the bank to below 20%.

The latest share sale sees £500m returned to the taxpayer and means around £10bn has now been recouped.

Lloyds received £20bn at the height of the financial crisis, with taxpayers taking a 40% stake in the group.

UK Financial Investments has been steadily reducing the government's stake in Lloyds since December.

The latest sale cut the government's stake in the bank to 19.93%. It has reduced its shareholding in the bank by 5% since the start of the year.

A Lloyds Banking Group spokesperson said the latest announcement showed "the further progress" made in returning the bank to "full private ownership and enabling the taxpayer to get their money back".

Shares in the bank were flat one hour into trading on the London Stock Exchange today at 86.57p.

Contrasting fortunes

The fortunes of the bank are in stark contrast to those of Royal Bank of Scotland (RBS), which was also rescued by the taxpayer during the financial crisis, but appears to be nowhere near ready to return to private ownership.

RBS, which is still 80% taxpayer-owned, reported a loss of £446m for the three months to 31 March last month after setting aside £856m for "litigation and conduct charges", as well as £453m for restructuring costs following the sale of its US bank, Citizens.

That compared with a profit of £1.2bn profit last year, when there were fewer one-off costs.

By comparison, Lloyds said in February it would resume paying dividends to shareholders for the first time since the financial crisis in 2008 as it reported full-year statutory profits of £1.8bn.

Lloyds said it would pay a dividend of 0.75 pence per share, amounting to £535m to be split among the bank's three million shareholders, with the largest share, £130m, going to the government.

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