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UK may divest remaining 33% of Lloyds stake in 2014

The British government is planning to divest its remaining 33% stake in Lloyds Banking Group over the next 12 months, as part of its strategy to complete the privatization of the bank and recoup the funds infused at the height of the financial crisis.


Sources close to the process were quoted by The Telegraph as saying that the entire 33% stake, which has been valued at nearly £18.4bn, would be disposed through a mixture of retail and institutional offerings.

In September 2013, the Government sold nearly 6% stake, representing 4,282,034,109 shares of the bank’s ordinary shares, for £3.2bn ($5.1bn).

The disposal of the proposed stake will enable the UK government to recover some part of £21bn taxpayers’ money, infused in Lloyds during the financial crisis of 2008.

The sources told the English daily that buoyed by the earlier successful sale, the Government could announce a possible sale of the remaining stake, most probably with the publication of the bank’s full-year financial results on 13 February 2014.

"Post-results is when a further institutional offering would make most sense. After that, the thinking is [that] an autumn sale, combining an institutional and a retail segment, is a realistic prospect," one source told the news agency.

"The full privatisation of the bank in 2014 may be a stretch and will be largely dependent on what it says about the dividend. Positive comments could open the way for a full exit," another source said.

UK Financial Investments (UKFI), which manages the government’s stakes in Lloyds and Royal Bank of Scotland (RBS), is reportedly exploring at different alternatives for the next sale of Lloyds shares.

A Treasury spokesman told the news portal, "The Government will sell further stakes in Lloyds when it is in taxpayers’ interest to do so. There is no fixed timetable to do this."


Image: The Edgbaston branch of Lloyds Bank at Five Ways, Birmingham, designed by PB Chatwin in 1908. Photo courtesy of Oosoom.