Bailed-out banking giant back in private hands

LLOYDS BANKING Group is back in private hands nearly nine years after the Government bailed out the lender at the height of the financial crisis, sources have said.

The high street bank said last week the Government’s stake had been reduced to 0.25 per cent and the UK taxpayer was set to make at least a £500m profit from the final sale.

It is understood the Government’s final tranche of Lloyds shares have now been sold, with an official announcement due today.

Speaking at the bank’s annual general meeting, chief executive Antonio Horta-Osorio said a return to private ownership represents a “major milestone” in efforts to turn the bank around from the “crisis” it faced a few years ago.

At its peak, Lloyds was 43 per cent owned by the state after the Government spent £20.3bn of taxpayers’ cash to bail it out during the banking crisis.

The Government had mulled over plans to shed its remaining stake in Lloyds through a retail sale, but former Chancellor George Osborne halted the attempt in January 2016, blaming market turbulence.

The idea was eventually ditched altogether by current Chancellor Philip Hammond in favour of a drip-feed sale to institutional investors through a trading plan, with any profits made being used to pay down the deficit.

While the taxpayers’ technical buy-in price for the bank was 74p during the crisis, the amount is calculated in the books by the Treasury at 61p after including money paid by Lloyds in Government fees.

Lloyds shares were valued at 70.2p when the London Stock Exchange closed yesterday.

The bank announced last month that it had doubled its profit in the first three months of the year amid a “sweet spot” thanks to the economy’s resilience since the Brexit vote. Pretax profits surged to £1.3bn, up from £654m a year earlier.