Osborne rules out public Lloyds sale

British chancellor George Osborne has ruled out a public offering of the UK government’s remaining shares in Lloyds Banking Group ahead of the general election next year.

Osborne rules out public Lloyds sale

The Treasury, which still owns 25% of the bank, is thought to have scrapped a public sale before May due to stock market volatility, geopolitical uncertainty, and the time it would take to launch the public offering.

The UK Treasury was left with a stake in Lloyds following its £20bn (€25bn) rescue during the financial crisis, after it swallowed up troubled Halifax Bank of Scotland.

Taxpayers originally owned 43% of Lloyds, but this was cut following share sales to institutions to 24.9% earlier this year. The Treasury last raised £4.2bn in March by selling shares at 75.5p to City investors.

But since June, Lloyds share price has fallen 6%.

In total, the Treasury has raised £7.4bn from two sales of shares to investors.

The Scottish independence referendum in September, the presentation of Lloyds full-year results in February, and the UK budget in March further narrow the window of when the marketing for a large-scale sale to the public could go ahead, according to Sky News.

Lloyds has also said it will apply to begin to pay dividends in the second half of this year.

The Treasury has not ruled out selling more shares to City institutions.

Last month, Lloyds posted a half-year profit of £863m, despite setting aside another £600m to cover mis-sold payment protection insurance.

A Treasury spokesman said: “The chancellor set out the government’s approach to the state-owned banks in his Mansion House speech last year: we want to maximise support for the British economy, get the best value for money for the taxpayer and return the state-owned banks to private ownership.

“Any decisions on share sales will be determined by value for money and market conditions.”

Lloyds closed at 73.68p on the FTSE100 yesterday.

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