Chancellor George Osborne confirms government will sell more Lloyds shares
The chancellor has announced the government will sell more shares in Lloyds Banking Group within the next six months.
The sale, to be managed by investment bank Morgan Stanley, will help the government raise up to £2bn, UK Financial Investments (UKFI), the body which manages the government's investments, confirmed.
Presently it owns around 17.8bn ordinary shares, representing around 25 per cent of the company.
George Osborne said in a statement:
I can confirm today that the government is taking the next step in returning Lloyds Banking Group to private ownership.
The trading plan I'm initiating today is made possible by our long term economic plan which is delivering a more secure and resilient economy. It is another step in reducing our national debt and in getting taxpayers' money back.
A trading plan involves the gradual sale of shares over time and could "commence in the coming days."
Shares will not be sold below the average price paid of 73.6p at the time of the bailouts back in 2008.
The government has so far raised £7.4bn through two shares sales in early 2013 and March this year. The sales reduced its stake from 40 per cent to just under 25 per cent.
It comes a day after Lloyds and another government-owned bank, RBS, scraped through the Bank of England's stringent new stress tests. The minimum capital ratio needed to pass the stress test is 4.5 per cent; and RBS had 4.6 per cent, while Lloyds had 5 per cent.
Earlier this year RBS was forced to reveal it had overstated its ability to withstand another financial crisis. The beleaguered bank was also slapped with a £56m fine for an IT glitch back in 2012.
Lloyds was saved through a £37bn bailout package alongside RBS by the government in 2008.