British government cuts Lloyds stake to below 17%

Britain has cut its stake in Lloyds Banking Group to below 17%, the country’s finance ministry said in a stock-market disclosure yesterday, taking the sum recovered by the UK taxpayer to £11.5bn (€16.2bn).

The taxpayer’s stake has fallen by 1%, to 16.87%, as UK Financial Investments (UKFI), which manages the government’s stakes in bailed-out banks, seeks to cash-in on investor appetite in Britain’s biggest retail bank.

“Today’s announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back,” a Lloyds spokesman said.

Lloyds was rescued at a cost of £20.5bn to Britain’s taxpayers during the 2007-2009 financial crisis. UKFI has extended a ‘trading plan’ that allows Morgan Stanley to sell Lloyds shares beyond its current, June 30 deadline, until the end of the year.

The government is expected to offer retail investors the chance to participate in an offer of several billion pounds worth of Lloyds shares.

The retail sale, in addition to the shares sold through the trading plan, could enable a full exit in the next year.

Shares have been sold through the plan at an average of more than 80p, well above the government’s average 73.6p buy-in price.