Treasury claws back £500m in share sale

THE Government has netted another £500 million from the sale of shares in Lloyds Banking Group.

The transactions mean the UK taxpayer now holds a 23.9 per cent stake in the bank, compared with 40 per cent when it was bailed out during the financial crisis.

The amount of money recovered from the bank is now just under £8 billion after the latest round of share sales was launched in December – a move cutting the Treasury’s stake from about 25 per cent.

All shares sold through the trading plan were made at a level above the average price the previous government paid for them, which was 73.6p.

Lloyds’ shares opened at about 78p, having been boosted by the prospect that it will announce its first dividend payout in seven years later this week.

A pre-election sale of shares in Lloyds to ordinary members of the public was ruled out last year by Chancellor George Osborne.

The Government has chosen to sell the stock over time “in an orderly and measured way’’ rather than through large tranches.

It said in December that it hoped to sell off a stake of up to five per cent in Lloyds Banking Group over the following six months to raise about £3 billion.

Mr Osborne said: “I am delighted to announce the trading plan I launched in December has raised a further £500 million for the taxpayer so far.”

Lloyds is expected to report annual pre-tax profits of around £2 billion on Friday, up from £415 million a year earlier, after putting aside another £600 million to compensate customers who were mis-sold payment protection insurance.