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Lloyds ready for government sale

Thursday, August 01, 2013 - 01:44

August 1 - Lloyds has accelerated its turnaround campaign and flagged a revival of payouts to shareholders, paving the way for the government to soon start selling its stake in Britain's largest retail bank. As Sonia Legg reports, its results contrasted sharply with rival Barclays.

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The state owns more than a third of Lloyds (39%) but that could be about to change. The banking group is recovering fast and Britain may soon start selling off its stake. Lloyds has met targets on cost savings, capital strength and margins earlier than expected. Dividends too are now a real prospect. Half year profit for the first six months of the year was just over £2 billion (£2.1 billion) - a year ago it lost almost half a billion pounds (£456m). Lloyds may now enter a race for cash with rival Barclays. It announced plans for a £5.8 billion cash call after disappointing results earlier in the week. IG's Alistair McCaig. (SOUNDBITE)(ENGLISH) IG MARKET ANALYST ALISTAIR MCCAIG SAYING: "Shareholders do tend to have exposure to more than just one of the UK banks and as such if they've already had to dip their hands in their pockets for Barclays you wouldn't want to be second in the queue." Lloyds shares jumped more than 7% to near three-year highs of 74 pence. The government says it needs 61 pence to break even on its £20 billion (£20.5 bln) bailout. It even faired better than Barclays in relation to a damaging mis-selling scandal. Lloyds has now set aside £7.3 billion to compensate those wrongly sold payment protection insurance. (SOUNDBITE)(ENGLISH) IG MARKET ANALYST ALISTAIR MCCAIG SAYING: "I suppose the fact that they've only had to allocate another £500 million to the misselling of PPI when you bear in mind that Barclays had to tag another £1.35 billion is in itself encouraging." But Treasury Minister Danny Alexander wouldn't commit to a sale date. (SOUNDBITE) (English) "The results today show that it is a bank that continues to take steps along the road to recovery and that of course is good news for the but it's good news for the tax payer too." Britain still has a large stake in Royal Bank of Scotland. Anything which suggests the country's financial industry is on the mend will be welcome news for the government.

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Lloyds ready for government sale

Thursday, August 01, 2013 - 01:44