Margareta Pagano: It would be wrong to discount Lloyds’ share sale to retail investors

In The City: Every penny that he manages to put on the share price should be returned to the taxpayer

For a small country Portugal is doing well with its exports. We’ve had Jose Mourinho’s success at Chelsea Football Club – the Basel loss was surely a one-off – Cristiano Ronaldo’s stunning play at Manchester United and now we can add Antonio Horta-Osario of Lloyds Bank to our team of dashing, Iberian heroes.

Indeed, the 49-year-old banker has done so well at Lloyds that in Portugal he’s hailed as “banking’s special one” – a compliment reserved usually for the country’s footballers – and now they want him back to take on the struggling economy.

Judging by the speed with which Mr Horta-Osario got Lloyds in a position to sell its shares, he deserves our praise too.

Over the last year Lloyds’ shares have risen 90 per cent, giving the Chancellor, George Osborne, the chance to sell them at 75p, a tiny discount to the market price and nicely ahead of the 73.6p which the Government paid for them during the £20bn rescue operation in 2008.

Slowly, taxpayer’s money is being returned – the Treasury made a £61m cash profit, giving us a paper profit of £586m from the £3.2bn sale as the shares were in the books at 61p.

The Portuguese banker was not surprised at the quick turnaround. In an interview after last week’s sale, he put success down to the way he attacked Lloyds’ balance sheet, slashed and disposed of many of its non-core assets, and switched borrowing away from risky, short-term funding. As the thousands of Lloyds staff who lost their jobs know, he has also slashed costs.

His strategy has paid off. Lloyds returned to profit of £2.1bn in the first six months of the year after the previous loss of £456m, helped by the Funding for Lending and Help to Buy schemes.

Both have allowed Lloyds to meet small-business lending targets and perhaps more pertinently, help the Government’s push to oil the housing market and keep mortgage lending flowing to new buyers; no wonder Mr Horta-Osorio (pictured) is a regular guest at No 11.

By far the best news from the sale was the appetite for more. It was 2.8 times oversubscribed with heavy buying from the US and other overseas investors banking on a recovery.

Many UK pension funds bought too, hoping for a speedy return to dividends. So the sale is clearly a good tonic for the UK. However, there’s still 32.7 per cent of Lloyds to go.

The next sale, expected after results next March, is likely to include a big tranche of shares to be sold to retail investors with a discount to sweeten them up.

This would be foolish. The Government should not be giving away anything to new investors considering how much previous ones lost as a result of Labour’s catastrophic decision to allow Lloyds to take over HBOS.

Those investors with long memories and short fuses remember when Lloyds TSB shares were worth around £5 each in the late 1990s, on an adjusted basis, and 230p not long before the disastrous HBOS merger, which lost them their shirts.

Mr Horta-Osorio should enjoy his moment of glory, but every penny that he manages to put on the share price should be returned to the taxpayer.

Showdown on pay

Pay for top bosses in the US just keeps on soaring.

Research by Bloomberg of the Standard & Poor’s 500 Index of companies shows that the average multiple of chief executive compensation to that of the average worker is now 204 times, up 20 per cent since 2009.

This included the pay of chief executives at eight public companies such as Starbucks, Ralph Lauren and Nike where the CEOs were paid 1,000 times more than their average worker.

There’s nothing new about these huge pay differentials but now US investors have the chance to look more closely.

After three years of lobbying by big business, the Democrat- led Securities and Exchange Commission voted last week on a rule requiring public companies to disclose the ratio of CEO compensation to the median of all other employees.

Most investors with half-a-brain could have guessed at these ratios anyway. The question to ask is now that they will know the multiples more precisely, will they do anything to halt them roaring higher still?