Osborne awaits Lloyds share price rise before next stock sell off
The Treasury is waiting for Lloyds’ share price to jump again before it sells the next tranche of shares in the bank.
Lloyds’ share price has fallen by around seven per cent in the past two months, in line with the rest of the sector, putting the brakes on the privatisation of the bailed out bank.
Crises across the globe including in Ukraine and Iraq have knocked investor sentiment, and the slow recovery in Europe has also hit shares. But chancellor George Osborne is understood to be keen to sell more shares the moment the stock bounces back.
Such a sale strategy means any such offering needs to be done rapidly – and that means involving institutional investors, not retail buyers.
Osborne is also expected to wait until Lloyds is paying a dividend, hoping this will attract more retail investors to pay a high price for the shares.
As the bank is applying this year for the right to pay a dividend, while the Treasury is busy with the Budget and the election, it is likely retail investors will have to wait until after the May 2015 vote before they can buy into the stake.
However, most of Lloyds is out of government hands already and can be bought on secondary markets.
“We want to maximise support for the economy, get the best value for money for the taxpayer and return the state owned banks to private ownership,” said a Treasury spokes-person. “Any decisions on share sales will be determined by value for money and market conditions.”