At last, Lloyds has repaid its £20bn bailout by taxpayers
Eight years after £20bn bailout to save Britain’s biggest bank . . .
LLOYDS has finally repaid the £20.3billion it was given by taxpayers, in a major milestone for the bank.
The last Labour government stepped in to save the stricken lender after its 2008 takeover of troubled rival HBOS went horribly wrong.
It led to the state acquiring a 43.4 per cent stake amid fears that a Lloyds collapse could turn the financial crisis into something even worse.
Now, more than eight years later, the Government has sold all but around 1.6 per cent back to private owners. It has earned £20.4billion from the sale, a profit of around £100million. The final shares, worth £73.7million at today’s prices, will be disposed of by the end of May.
Chancellor Philip Hammond welcomed the sale, saying yesterday: ‘While it was right to step in with support during the financial crisis, the Government should not be in the business of owning banks in the long term.
‘The right place for them is in the private sector and I’m pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds.’
TAXPAYERS have finally clawed back the £20.3bn they pumped into Lloyds – eight years, six months and eight days since it was bailed out at the height of the financial crisis.
Last night Chancellor Philip Hammond revealed that the Government had got its money back after selling nearly all the 43.4pc stake it bought in 2008.
Around 1.6pc of shares still belong to the Treasury and will generate a small profit when they are sold – thought to be in the next few days.
Speaking at the International Monetary Fund’s spring meetings in Washington, he said: ‘Recovering all of the money taxpayers injected into Lloyds marks a significant milestone in our plan to build an economy that works for everyone.
‘While it was right to step in with support during the financial crisis, the Government should not be in the business of owning banks in the long term.
‘The right place for them is in the private sector and I’m pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds.’
The sale highlights the remarkable turnaround at Lloyds, which nearly collapsed after stepping in to prop up toxic bank HBOS in September 2008.
As markets plunged and the financial system came within hours of total collapse, speculators turned on HBOS and caused wild swings in its share price.
Lloyds made a £12bn takeover bid to rescue its stricken rival from oblivion, and the Labour government altered competition law to get the deal through. Then-prime minister Gordon Brown is said to have told Lloyds chairman Sir Victor Blank at a cocktail party in Spencer House, a palace overlooking Green Park in London, that he would help force the plan through.
But HBOS’s financial position was so weak that it almost dragged its buyer down with it. Lloyds had always been seen as a reliable dividend-producing machine, run far more sensibly than its rivals. In October 2008, bosses were forced to beg the Government for support.
The following year, they stunned the City by revealing HBOS had made an £11bn loss.
Their toxic takeover did so much damage that Lloyds did not return to profit until 2010.
Chief executive Antonio HortaOsorio said: ‘As the Government announces it has now received all of the £20.3bn that was originally put into the group, it is a moment of huge pride for all of us at Lloyds.’