Taxpayers make further losses on Lloyds Bank shares as Government cuts stake below 6%

The public is no longer the largest shareholder in the lender but questions over value for money remain

The Government said it hoped to offload its remaining shares in Lloyds within a year (Getty)

The taxpayer is no longer the largest shareholder in Lloyds Banking Group after the Government reduced its stake to less than 6 per cent. But the public has lost more money as the shares languish below the price Gordon Brown’s government paid for them in 2009.

UK Financial Investments (UKFI), which manages the government’s stake in Lloyds, cut its holding in the lender from 6.93 per cent to 5.95 per cent after selling around 700 million shares. UKFI has not stated the exact price achieved for the stake, but Lloyds has been trading below 65p for most of the last month – less than the 73.6p taxpayers paid to bail out the stricken lender during the financial crisis.

UKFI said more than £18bn had been returned to Government coffers since the lender’s £20.3bn bailout.

However, that figure also does not take into account the interest paid on the billions in debt the Government used to buy its stake or fees paid to investment bankers to manage the sale, the National Audit Office has noted.

In October the Government controversially ditched plans for a share sale to the public, opting instead to offer the stake to institutional investors. It said it hoped to offload its remaining shares in Lloyds within a year.

Lloyds boss Antonio Horta-Osorio said: “Today’s announcement that the UK Government is no longer our largest shareholder is a key milestone in the journey of Lloyds Banking Group back to full private ownership, returning taxpayers’ money at a profit.

“It also reflects the hard work undertaken by everyone at Lloyds over the last five years to transform the Group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper.”

The Government still retains a 73 per cent stake in Royal Bank of Scotland, which has been hit by ongoing scandals, keeping its share price low and making an imminent disposal unlikely.

In October, leaked internal documents supported allegations that the bank had systematically squeezed its small business owner customers in order to extract profits from them when they were at risk of insolvency. RBS also faces up to $12bn in fines from US regulators over allegations of mis-selling mortgage-backed securities.