Lloyds taxpayer stake sold by Treasury at 5% discount

George Osborne says sale represented 'good value' for taxpayers

The Treasury has sold another 8 per cent of the taxpayers' stake in Lloyds Banking Group at a bigger loss than its previous sell-off in September.

Chancellor George Osborne said the sale was “good value”, and the £4.2 billion sale of 5.35 billion shares would reduce the national debt by £787 million. The shares were sold overnight to institutional investors at 75.5p.

That is just 0.5p more than the first sale achieved last September and was at a 5 per cent discount to Lloyds’ closing price of 79.1p. The September share sale went through at a much lower 3 per cent discount. Lloyds shares fell 3.1p to 76p.

Analyst Ian Gordon of Investec pointed out that UK Financial Investments, which holds the Treasury’s stakes in bailed-out banks, went ahead with the sale just two days after Lloyds shares hit their 2014 low point. He rates the shares a buy with a target price of 85p.

Based on the 73.6p the Treasury paid in the £20 billion bail-out of Lloyds in 2009, it has made a tiny £101 million profit on the shares sold today. The taxpayer stake is now 25% with a further sale, expected to be offered to the public, unlikely until the autumn.

City grandee Lord Levene today called for a full inquiry into the failed sale of 632 Lloyds branches after former Co-op Bank chairman Paul Flowers claimed he was under political pressure to do the deal.

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