U.K. Government to Restart Lloyds Bank Share Sale
October 07 2016 - 11:30AM
Dow Jones News
LONDON—The U.K. government Friday announced it will re-start the
privatization of Lloyds Banking Group PLC by drip selling shares
into the market.
The British Treasury, which owns a 9.1% stake in Lloyds
following a bailout in 2009, said in a statement that it had
ditched a plan to sell its stake via a retail offering to members
of the public. Instead Morgan Stanley will be appointed to slowly
sell the shares over the next 12 months.
"I have listened to the experts. Ongoing market volatility means
it is not the right time for a retail offer," U.K. Chancellor
Philip Hammond said in a statement.
Unlike a previous plan to sell down the stake, Mr. Hammond
didn't pledge to sell the shares above the price the government
paid for them. Lloyds shares currently trade at 53 pence, well
below the average 73 pence buy in price paid by British taxpayers.
Following the June Brexit vote, Lloyds's shares lost a quarter of
their value, raising questions whether the Treasury would exit the
bank soon.
So far the Treasury has recouped around GPB 16.9 billion from
previous Lloyds share sales. British taxpayers pumped just over
GBP20 billion into the lender to save it from collapse during the
financial crisis. In statement Lloyds welcomed the Treasury's
decision.
More complex is the prospect of returning part of the GBP45.5
billion that was pumped into Royal Bank of Scotland Group PLC
during the crisis. On Friday Mr. Hammond dismissed the idea of a
quick sale of its 73% stake in RBS. "It is clear that disposal of
the RBS shares at a price that recovers taxpayers investment is not
practical at the moment," he said during a visit to the U.S. The
bank will first have to settle allegations around the sale of toxic
mortgage backed securities with the Justice Department and then
dispose of its Williams & Glyn retail unit before any
privatization proceeds, Mr. Hammond added.
Write to Max Colchester at max.colchester@wsj.com and Jason
Douglas at jason.douglas@wsj.com
(END) Dow Jones Newswires
October 07, 2016 11:15 ET (15:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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