Stake disposal sees Lloyds on way to private ownership

● Taxpayer stake now below 3% and could fall to zero before the summer

Lloyds Banking Group is likely to return to full private ownership by the summer after the UK government yesterday sold down a further 1 per cent shareholding.

UK Financial Investments, which manages the taxpayer’s stake in the Bank of Scotlandowner, trimmed its holding to just below 3 per cent.

The latest disposal means that more than £19.5 billion has now been returned to Treasury coffers since the lender’s £20.3bn bailout at the height of the financial crisis. This includes some £500 million in payouts to shareholders since Lloyds resumed paying dividends in 2014 as it has returned to profit growth in recent years.

The government has progressively sold down its original 43 per cent stake and current Chancellor Philip Hammond scrapped plans for a share sale to the public in October, opting instead to offload the holding to institutional investors. Since January, the government has no longer been the bank’s largest shareholder.

Lloyds chief executive Antonio Horta-osorio said: “Today’s announcement moves Lloyds another step closer to full private ownership, and we are pleased that the group’s strong financial performance has kept us on

0 The UK government has been selling down its original 43 per cent holding in the bailed-out lender track to return more money to taxpayers than was put in.”

The City is expecting the banking giant to return to full private ownership by June.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The finish line is now within sight for the UK taxpayer, who can look forward to recovering all the money pumped into Lloyds during the financial crisis. Meanwhile, Lloyds continues to make ground in its quest to become a normal, fully privatised bank.”

The bank unveiled its highest annual earnings result for a decade last month, with bottom-line profits more than doubling to £4.24bn last year from £1.64bn in 2015, thanks largely to lower costs of compensation for payment pro- tection insurance (PPI). But Lloyds has said the PPI scandal continues to cost it dear, revealing an extra £350m in provisions for compensation just last week, which brings its total PPI bill to in excess of £17bn.