Outlook "What is good for the UK economy is good for Lloyds." So said chief executive Antonio Horta-Osorio as the Black Horse moved its numbers back into the black and whetted the City's appetite over an imminent sale of the taxpayer's 39 per cent stake in the bank.
Costs are down, loan impairments are down and even a return to dividends may be on the cards, as Lloyds aspires to comforting dullness after being too far too exciting since its disastrous Government-brokered takeover of HBOS in 2008. As a proxy for the UK economy, it is a good sign, too – with very little in overseas exposure and investment banking. The bank's fortunes are moving neatly in lockstep with healthier growth figures.
But Lloyds is also comfortably the biggest mortgage lender in the country, reminding me of the conspiracy theory laid out by one City analyst over lunch the other day, that the Chancellor had only launched his Help to Buy scheme back in March to pep up the housing market and help get the Lloyds share sale off the blocks.
Since the Budget in March, shares in the lender have jumped by more than 50 per cent, taking them well above the Government's break-even price for the original £20bn bailout. Mr Horta-Osorio was waxing lyrical about Help to Buy as a "very important move" yesterday, praising it for helping to increase liquidity in the market and offering support for house prices, without of course mentioning that the prospect of Government-guaranteed mortgages from next year looks like being very good for business – especially when the Bank of England doesn't look like raising interest rates for at least two years.
Think about it: George Osborne gets a bit of housing-inspired growth and the taxpayer out of the bank at a morale-boosting profit before the next election. Mr Horta-Osorio gets the state off his shares register, a bigger bonus and a stronger balance sheet as the economy picks up. Just don't ask what happens if house prices cool when the guarantee scheme ends.