UK cuts Lloyds Banking Group stake

Britain has cut its stake in Lloyds Banking Group to just below 9% in a renewed attempt to return the lender to full private ownership over the next year.

UK Financial Investments Limited (UKFI), which manages the government’s stake in the bailed-out bank, said earlier this month it would resume share sales that were shelved almost a year ago because of market turbulence.

Yesterday’s announcement of the sale of about 1% of Lloyds’ shares came a day after the bank defied expectations of a post-Brexit earnings squeeze by reporting third-quarter profits largely unchanged from a year earlier.

Lloyds was rescued with a £20.5bn (€22.8bn) taxpayer-funded bailout during the 2007-09 financial crisis, leaving the UK state holding 43%.

Some politicians and banking analysts have questioned whether restarting sales of the government’s residual £3.6bn stake in the middle of a slump in bank shares represented the best value for taxpayers.

“Most people will be thinking now is the time to sit tight and shut up shop”, said Laith Khalaf, senior analyst at Hargreaves Lansdown.

Meanwhile, Deutsche Bank’s surprise third-quarter profit of €256m was overshadowed yesterday by chief executive John Cryan failing to dispel concerns that uncertainty tied to a US settlement will continue to linger.

Mr Cryan, 55, has struggled to stem a slide in shares and maintain client confidence after the US Department of Justice last month requested $14bn (€12.8bn) to settle a probe into faulty securities, more than twice the bank’s legal provisions. Deutsche shares have dropped 41% this year.