Surprise as Treasury reveals Lloyds shares sale

(Peter Macdiarmid/Getty Images)

A fresh batch of state-owned Lloyds Banking Group shares will be sold into the market over the coming months.

The Treasury said UK Financial Investments – which is supposed to managed the taxpayer’s stake in banks at arms length from the Government – had created a “trading plan” for a gradual sell off over six and a half months.

There have been two previous sales but these both involved large chunks of shares disposed at once to big investors. The sales reduced the state’s stake to just under 25 per cent from 40 per cent.

The announcement of a third sell off took the City by surprise, coming as it did just a day after Lloyds scraped through bank of England stress tests.

Some analysts said the test result would dash hopes of an early resumption of dividend payments. Stockbroker Jeffries believes payments will not resume until 2016.

Lloyds must secure approval from the Bank of England first. Announcing the plan, the Chancellor George Osborne said: “It is another step in reducing our national debt and in getting taxpayers’ money back.”

The earlier sales raised £7.4bn for the state’s threadbare coffers and the trading plan could see the taxpayer’s stake in Lloyds reduced to 20 per cent. Shares will not be sold below 73.6p, the average price paid by the taxpayer in the bailout.