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UK Lloyds exit looms large and proud

Wednesday, Mar 26, 2014 - 02:00

Mar 26 - The UK government has sold 4.2 billion pounds ($6.9 billion) worth of shares in Lloyds Banking Group. As Joanna Partridge reports it puts Britain's largest retail bank on course for a complete return to private ownership within a year.

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Sold for 4.2 billion pounds - a near 8% chunk of shares in Lloyds Banking Group. The UK government now only has a near 25% stake in the country's largest retail bank. Finance Minister George Osborne says the 75.5p price was "good value". But Britain's taxpayers will only make a slim profit on the 20 billion pounds they paid to rescue Lloyds in 2009. Michael Hewson is from CMC Markets. SOUNDBITE: Michael Hewson, Market Analyst, CMC Markets, saying (English): "It's only half a pence above the previous placement of shares by the UK government and it's part of the long-term plan to reduce taxpayer exposure to that particular bank. Lloyds is a success story, in inverted commas, the goverment has made money out of it." The government is keen to fully exit the bank before an election in May 2015 A further sale is likely later this year - assuming the economy continues to grow at the current pace. SOUNDBITE: Michael Hewson, Market Analyst, CMC Markets, saying (English): ''I think there is some concern that the retail investor hasn't been involved in it. I think that could come later this year, always assuming that the UK economy continues to improve, because rising property prices certainly helps Lloyds Banking Group and its bad debts, or portfolio of bad debts, because essentially asset prices are continuing to rise. So from that point of view, a recovering UK economy continues to benefit the bank." Lloyds shares fell more than 4% on the news But they've surged 58% since the start of 2013 and trade on 1.5 times their book value - that's the highest valuation of any UK bank. The sale is also seen as a vindication for Chief Executive Antonio Horta-Osorio. He took over in 2011 and refocussed the bank on domestic retail customers. Its recovery is seen as a milestone - UK taxpayers pumped 66 billion pounds into Lloyds and RBS at the start of the financial crisis. RBS is several years behind Lloyds and may never return a profit.

UK Lloyds exit looms large and proud

Wednesday, Mar 26, 2014 - 02:00

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