Taxpayers lost £230m in Lloyds share sale
Figures undermine Osborne's claims that sale presented a profit for taxpayers
Wednesday 18 December 2013
Taxpayers lost at least £230 million from the sale of a 6 per cent chunk of state-backed Lloyds Banking Group to the private sector, according to a National Audit Office report.
The figure takes into account the cost of borrowing money to fund the bank's bail-out in 2009.
The September sale of 4.2 billion shares for £3.2 billion contradicts George Osborne’s claims that it represented a profit for taxpayers, given the shortfall of at least £230 million.
The new set of figures would suggest that the overall loss on the £20 billion bailout for the bank could be nearly £1.5 billion if the rest of the taxpayer stake is sold off at a similar price - although the report itself did not make such a calculation.
The NAO highlighted that the 3 per cent discount on the 75p share price, which was just above 77p at the time of the close just before the sale took place, compared favourably to the average discount of 4 per cent on the ten last comparable sales since 2008.
The shares were subscribed 2.8 times over but pricing them higher would have required allocating more than 60 per cent to shorter-term investors, risking the future performance of the stock, according to the watchdog.
The report, which is broadly positive about the handling of the sale, said the “shortfall should be seen as part of the cost of securing the benefits of stability during the financial crisis, rather than any reflection on the sale process."
The NAO also found that the average rate paid by the Government for the shares of 73.6p was reduced to 72.2p by taking into account fees paid by the bank to the Treasury.
The Government acquired a 39 per cent stake of Lloyds in 2009. It currently holds a 32.7 per cent chunk. The Treasury aims to return the banking group to full private ownership by 2015.
Additional reporting by agencies
- 1 What happens to your body when you give up sugar?
- 2 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 3 Have sex with your iPad thanks to the new sex toy no-one asked for
- 4 African jawbone discovery pushes birth of humanity back by 400,000 years
- 5 The 'sex selfie stick' lets you FaceTime the inside of a vagina
Out-of-touch MPs ‘don’t get it’, says ex-Civil Service chief
George Clooney and Amal fail to get special treatment at New York restaurant
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
African jawbone discovery pushes birth of humanity back by 400,000 years
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...