GOVERNMENT STAKE IN LLOYDS BANKING GROUP NOW LESS THAN ONE PER CENT
The taxpayer’s stake in Lloyds Banking Group has been cut to below 1% as the Government edges closer to fully privatising the lender.
UK Financial Investments, which manages the stake in Lloyds, cut its holding by around 1% to 0.89%. Last week, Chancellor Philip Hammond said the Government has recouped the £20.3 billion used to bail out Lloyds during the financial crisis.
At its peak, Lloyds was 43% owned by the state. More than £20.4 billion has now been returned to Government coffers since the lender’s bailout.
This includes around £500 million in payouts to shareholders since the bank resumed paying dividends in 2014 as it has returned to profit growth in recent years.
The taxpayer’s final stake in Lloyds is expected to be sold off in the coming weeks, with any profits being used to pay down the deficit.
The announcement comes a week after the Chancellor admitted that the Government is prepared to sell its 72% stake in Royal Bank of Scotland (RBS) at a loss to the public purse.
On Thursday, Lloyds announced that profits have doubled in the first three months of the year amid a “sweet spot” thanks to the economy’s resilience since the Brexit vote.
The lender posted first-quarter pre-tax profits of £1.3 billion, up from £654 million a year earlier.
This came despite the bank being forced to set aside £350 million to cover mis-sold payment protection insurance (PPI) claims and £100 million to cover compensation for victims of fraud by former HBOS staff.
Lloyds – a bellwether of the economy, given its position as the biggest mortgage lender – said growth remained strong and is expected to continue at a similar rate to 2016, at around 2%.