U.K. Government to Re-start Sale of Its Lloyds Banking Group Stake
October 07 2016 - 9:49AM
Dow Jones News
By Max Colchester
The U.K. government Friday announced it will re-start the
privatization of Lloyds Banking Group PLC (LLOY.LN) by drip selling
shares into the market.
The British government, which owns a 9.1% stake in Lloyds
following a bailout in 2009, said in a statement that it had
ditched a plan to sell its stake via a retail offering to members
of the public. Instead Morgan Stanley will be appointed to slowly
sell the shares over the next 12 months.
"I have listened to the experts. Ongoing market volatility means
it is not the right time for a retail offer," U.K. Chancellor of
the Exchequer Philip Hammond said in a statement.
Unlike a previous plan to shed the stake, Mr. Hammond didn't
pledge to sell the shares above the price the government paid for
them. Lloyds shares currently trade at 53 pence, well below the
average 73 pence buy-in price paid by British taxpayers. Following
the June Brexit vote, Lloyds' shares have lost a quarter of their
value, raising questions about whether the Treasury would exit the
bank soon. Analysts say that lower interest rates in the U.K. could
pinch future bank profits.
So far, the Treasury has recouped around GPB16.9 billion ($21.4
billion) from previous Lloyds share sales. British taxpayers pumped
just over GBP20 billion into the lender to save it from collapse
during the financial crisis.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
October 07, 2016 09:34 ET (13:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Lloyds Banking (NYSE:LYG)
Historical Stock Chart
From Aug 2024 to Sep 2024
Lloyds Banking (NYSE:LYG)
Historical Stock Chart
From Sep 2023 to Sep 2024