James Moore: Sell-off is tough on Lloyds, tougher on the taxpayer

Click to follow

Outlook It is hard, but you have to sympathise with Lloyds a bit. The bank is having to offload more than 600 branches at the worst possible time.

Whatever the quality of the business – and that is open to some debate – its current owner is unlikely to achieve a price even close to what it might be worth in a few years' time.

All banks currently boast a sizeable uncertainty discount because the investment community is not sure how the raft of new regulations facing the industry will affect their returns.

But whatever the impact, it is unlikely to be so significant that banks will be trading at their current levels of just 40 to 50 per cent of their book values when the dust has settled.

So if you have a banking asset you want to sell, now is a very good time to sit on it, even you are motivated by public relations concerns (and didn't that blow up in the face of the Government and UK Financial Investments when Virgin got Northern Rock for a song).

Unlike UKFI, Lloyds doesn't have a choice. The disposal of the business now known as Verde – Spanish for Lloyds' corporate colour green and a name shared by a maker of BMX bikes and an Italian restaurant in Sydney – has been mandated by EU regulators.

It is the price the bank is having to pay for the billions of pounds in state aid that was pumped in to save it from drowning during the financial crisis.

It might be tempting to think: tough on the black horse. Lloyds deserves to take a hit as the price for going cap in hand to the taxpayer.

But as the biggest shareholder in Lloyds, it is us as taxpayers that get hurt as a result.

In other words, we are being kicked twice for our involvement with this bank. First by the last Government, now by the EU.

Eurosceptics would argue that it is hardly the first time the Europe has hit the UK taxpayer where it hurts.