Public will be offered shares in Lloyds Bank, says George Osborne
Chancellor says economic revival will enable bank to be returned to the private sector
The prospect of an eventual “tell Sid”-style sale of shares in Lloyds Bank was raised by George Osborne as he claimed Britain’s economy had emerged from “intensive care”.
The Chancellor argued that signs of economic revival enabled the Government to begin planning the return of Lloyds to the private sector.
In his annual Mansion House speech, he also announced ministers were considering breaking up RBS by hiving off its potentially toxic assets into a “bad bank”.
The Chancellor did not set a timetable for the sale of Lloyds, or the proposed price at which shares would be sold, but made clear it was being studied as a matter of urgency.
His comments signalled that Lloyds could be returned to full private ownership by the general election. However, he warned any sale of RBS, in which the taxpayer has an 81 per cent stake, was still some way off.
Mr Osborne said: “Nothing better signals Britain’s move from rescue to recovery than the fact we can start to plan for our exit from government share ownership of our biggest banks.”
The first tranche of shares in Lloyds are likely to be offered to institutional investors, followed by a possible sale to the general public. It could be modelled on the popular “tell Sid” sale of British Gas shares in the 1980s. Mr Os- borne said the Government was “actively considering” returning Lloyds to the private sector because of its healthy share price and growing levels of interest among investors.
“For the first block of Government shares, an institutional placement is likely to be the most effective way of managing risk and getting value.
“So five years on from the financial crisis, we can now take the first steps to returning Lloyds to the private sector where it belongs. And for later sales of shares, we will consider a retail offering to the general public.”
He stressed: “We will only proceed if we get value for the taxpayer and we have no pre-fixed timescale or method of disposal.”
The Chancellor said RBS remained “weighed down by too many poor assets – loans issued in the boom that have gone bad and may take a long time to improve”. He said the Treasury would urgently conduct a review, to be completed by the autumn, into whether to split it into a “good bank” and a “bad bank”, ultimately paving the way to a sale of shares.
“This would then enable RBS to focus on the good parts of its business, supporting the British economy and maximising the benefits for the taxpayer,” Mr Osborne said.
He suggested the worst of Britain’s economic woes could have passed, although he warned that the situation in the eurozone remained fragile and said recent volatility in the financial markets was a reminder that no recovery would be straightforward.
But the economic news had improved in recent months with economic growth, falling unemployment and increasing business confidence, he added.
- 2 How the language you speak changes your view of the world
- 4 Italian police 'reveal' what Jesus looked like as a young boy
'Fire at every person you see': Israeli soldiers reveal they were ordered to shoot to kill in Gaza – even if the targets may have been civilians
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
First-time buyers in London 'need to earn at least £77,000'
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
£20000 - £25000 per annum + commission: SThree: Real Staffing's Pharmaceutical...
£18000 - £25000 per annum + Commission: SThree: Are you great at building rela...
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...