HM Treasury announced today that the government has started selling part of its shares in Lloyds Banking Group, following advice from UK Financial Investments. to the Chancellor George Osborne yesterday. that it would be appropriate to begin the process
Privatisation of Lloyds Banking Group has begun with 6% of the shares in the bank being sold at a price of £0.75 per share, reducing the government’s stake in Lloyds from 38.7% to 32.7%. However, it retains an 81% stake in Royal Bank of Scotland (RBS) and there are currently no plans to sell RBS shares.
According to the BBC, the shares were not offered to the public and were sold only to institutional investors, where interest in acquiring Lloyds shares was stronger than expected. In the next phase of the sell-off, Lloyds shares are expected to be offered to retail investors. However, the government will not sell any further Lloyds shares for 90 days.
A profit of £3.2bn was made in the sale, which will be used to cut the national debt by £500m.
The Chancellor, George Osborne, said:
“This is another step in the long journey in putting right what went so badly wrong in the British economy; it’s another step in repairing the banks; it’s another step in getting the money back for the taxpayer; and it’s another step in reducing our national debt.
“All of those things together are good news.
“If you look at what has happened over the last 12 hours with Lloyds, you have investors from around the world investing in a British bank. That is a sign the British economy is turning a corner.”