Britain has launched the sale of its shares in part-nationalised Lloyds Banking Group, a milestone in the country’s recovery from the 2008 financial crisis.
U.K. Financial Investments (UKFI), which manages the government’s stake in Lloyds and Royal Bank of Scotland, said it would sell 6 per cent of shares in Lloyds, worth £3.3-billion based on Monday’s closing share price.
Britain’s Conservative-led coalition government considers the sale as a key step in its recovery from the 2008 financial crisis, during which taxpayers pumped a combined £66-billion into Lloyds and RBS.
“We want to get the best value for the taxpayer, maximise support for the economy and restore them to private ownership. The government will only conclude a sale if these objectives are met,” a Treasury spokesman said.
Britain pumped £20.5-billion into Lloyds during the crisis, leaving taxpayers holding a 38.7 per cent stake. The sale will reduce its stake to 32.7 per cent.
Sources with direct knowledge of the sale process said it is likely to be completed before the market opens on Tuesday and at a “very tight discount” to the current share price.
Shares in Lloyds closed on Monday at 77 pence. The average price at which the government bought the shares was 73.6 pence and sources have said the sale will be above that.
The sale will be a vindication for Lloyds’ Chief Executive Antonio Horta-Osorio, who has put the bank ahead of schedule on its goals for cost savings and capital strength and restored the bank to profitability since his appointment in 2011.
The turnaround had prompted hopes the bank will start paying dividends again next year, having seen its shares double in value over the past year.
“I believe this reflects the hard work undertaken over the last two years to make Lloyds a safe and profitable bank that is focused on supporting the U.K. economy,” Horta-Osorio said.
UKFI, which manages the government’s stakes in Lloyds and Royal Bank of Scotland, said it had agreed not to sell any more shares in the bank for a period of 90 days. J.P. Morgan, Bank of America Merrill Lynch, and UBS are handling the sale.