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.