UK gears up for sale of Lloyds stake

Britain could soon start selling its stake in Lloyds Banking Group after the country’s largest retail bank accelerated a turnaround and flagged a return to payouts for shareholders.

Prime Minister David Cameron is keen to show that Britain’s part-nationalised lenders are on the mend, and a profitable sale of part of the state’s 39% stake in Lloyds would allow him to claim at least partial success.

The government could sell a tranche of about £5bn (€5.8bn) — or a quarter of its stake — to institutional investors, such as pension and hedge funds, in the next week, sources said.

If that doesn’t happen, the government will probably wait until September, they said. Bankers dislike selling shares in August as many investors are on holiday.

Lloyds chief executive Antonio Horta-Osorio is keen for the sale to start. “I do believe we have delivered on our part and the government can now start selling shares,” he said yesterday.

“It’s now up to the government to decide how and when to sell. They can now give taxpayers a profit on the shares.”

Lloyds said it was ahead of schedule on goals for cost savings and capital strength. It raised guidance for profit margins after beating forecasts with a near trebling of first-half underlying profit to £2.9bn.

That performance means Lloyds will start talks with regulators about resuming payouts to shareholders — seen as an important step towards a stake sale.

Shareholders have not received a dividend from Lloyds since its ill-fated rescue of rival HBOS in 2008.

- Reuters

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