The British government has reduced its stake in Lloyds Banking Group, following the sale of 7.78% of its shares at GBP0.755 per share, HM Treasury announced on Wednesday.
Lloyds Banking Group was bailed out by the government in the autumn of 2008, when it paid an average of GBP0.736 per share to rescue the failing bank. The government has cut its stake in the bank to 24.9% and has reportedly secured further value for the taxpayer, with the proceeds of £4.2 billion used to pay down the national debt. The UK government also has a long term economic plan to build a stronger and safer banking sector.
UK Financial Investments (UKFI), which is responsible for managing the Government’s shareholdings in The Royal Bank of Scotland Group plc and Lloyds Banking Group plc, advised the Chancellor of the Exchequer on 25 March 2014 that it would be appropriate to sell part of the government’s shareholding in Lloyds. The Chancellor, the Rt Hon George Osborne MP, authorised the process to the disposal, which was effected by way of a placing of ordinary shares through an accelerated bookbuilding process to institutional investors. The settlement of the placing will take place on 31 March 2014.
HM Treasury’s shareholding in Lloyds Banking Group will be reduced from 23,326,529,533 ordinary shares, which represents approximately 32.7% of the ordinary share capital of the company, to 17,771,118,604 ordinary shares, or approximately 24.9% of the ordinary share capital. Therefore the overall size of HM Treasury’s shareholding will be reduced by 23.8%.
According to HM Treasury, it has now sold 36% of the government’s original stake in Lloyds, which currently stands at 24.9%.
The BBC reported that Lloyds achieved profits of GBP415m for 2013, against losses of GBP606m for 2012, the banking group’s first bottom-line profit since 2010