The prospect of the Government getting rid of its stake in Lloyds moved closer yesterday as shares in the bank broke the level set as the break-even price for taxpayers.
Lloyds' shares rose 1.93p, or 3 per cent, to 62.84p, above the 61.2p the Treasury said earlier in the year would be the threshold for breaking even.
However, it is believed that a sale of the taxpayers' 39 per cent stake will not be considered by the Government until Lloyds manages to trade consistently above the level.
Lloyds' share price has more than doubled over the past year, and yesterday's rise came in the wake of soothing words from its chief executive Antonio Horta-Osorio, who told shareholders at its annual meeting in Edinburgh on Thursday that the bank expected to return to profit this year. That would be its first full-year profit since 2010.
"It's a big trade-off between returning the shares to the markets as quickly as possible (well before the 2015 election anyway), and taking the opportunity to make up for some of the costs taxpayers incurred via forced bailouts," said Accendo Markets' head of research Mike van Dulken.
Shares in the other taxpayer-owned bank Royal Bank of Scotland also rose yesterday, by 18p to 336.8p, although it is still far off the average price of 502p the Government paid.