James Ashton: Time to encourge retail investors to turn blue

Outlook There are 3 million retail investors in Lloyds Banking Group who will have heard of chief executive Antonio Horta-Osorio's willingness for more small shareholders to join his register with grim resignation.

They are the sorry band of owners, most of whom picked up free shares in the Halifax demutualisation, which created the bank that was rolled into HBOS and later saved by Lloyds. For all the talk of Lloyds' recovery prospects now, most of those 3 million, who account for 12 per cent of Lloyds' equity, have a dim and distant memory of the day HBOS shares hit £10 apiece. They didn't sell then, and they have no reason to sell now.

But remembering their journey is a salutary tale that stocks can go up as well as down – whatever the broker notes on Royal Mail would have excited punters believe. It also acts as a reminder of the shareholder inertia that a solid retail base brings. The grumbling that surrounded the terms of Santander's takeover of Abbey National – another former mutual – hasn't been sufficient for the million-plus British shareholders to sell out of the Spanish bank nine years after the deal was struck.

Investing in a bank should be as boring and utilitarian as borrowing from one. I can only surmise that the Government didn't think Lloyds was boring enough when it sold the first tranche of shares last month.

That deal, priced at 75p, cut the taxpayer stake from 39 per cent to 33 per cent and raised £3bn. So there is plenty more equity to be transferred into retail hands and if Mr Horta-Osorio can be believed, the dividend should make them worth hanging on to. I wouldn't blame the 3 million-strong army if it didn't feel like topping up its holding, but plenty of others will view this as a decent opportunity.

The important thing the Government must remember is that retail investors should not be left to play second fiddle as the Business minister, Michael Fallon, looks for other assets that can be sold.

Reversing the decline in retail share ownership is a valid strategy to improve trust between big business and the man on the street. Despite reports of economic bounceback, he is the one suffering from a real-terms wage decline. There is no better way of reconnecting blue-chip firms with the public than letting them buy a piece of the action as early and easily as possible.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable