Britain’s state-rescued Lloyds Bank back in private hands

 17 May 2017 - 23:55

Britain’s state-rescued Lloyds Bank back in private hands
A man passing a Lloyds logo outside the entrance to an office of Lloyds Banking Group in London.

AFP

London:  British bank Lloyds, bailed-out by the UK government at the height of the financial crisis, said yesterday that it had returned to full private ownership. “Lloyds Banking Group has... notified the market that the government’s stake in the group has been reduced to zero; as such, the group has returned to full private ownership,” it said.
The government had been steadily offloading its stake as LBG recovered, resulting in £21.2bn ($27.4bn) returning to the taxpayer. This is £894m more than the government’s initial investment, including more than £400m in dividend payouts, Lloyds said yesterday.
“Today the government has sold its last shares in Lloyds Banking Group, receiving more money than was originally invested,” said LBG chief executive Antonio Horta-Osorio.  “Thanks to the hard work of everyone at Lloyds, we’ve turned the group around.”
The British government bailed out Lloyds following the 2008 world financial crisis at a cost of £20.3bn, handing the state a 43-percent stake in the bank. The government still owns 73 percent of Royal Bank of Scotland, which was rescued with £45.5bn of taxpayers’ cash during the crisis in the world’s biggest bank bailout.
“RBS still casts a long shadow over the banking bailout... seeing as the taxpayer funding package was twice as big,” said Laith Khalaf, analyst at stockbroker Hargreaves Lansdown.  “Progress has been slower at RBS because it had more problems to start with, and it’s difficult to see how the government can realistically sell off its... stake in the bank without taking a financial hit.”
On the London stock exchange, shares in LBG rose 0.8 percent to 70.69 pence in early deals on the benchmark FTSE 100 index, which was 0.3-percent higher overall.  US fund manager BlackRock remains the bank’s single biggest stakeholder with around seven percent.
“It’s been a long and winding road back to recovery, but finally the government has sold its last stake in Lloyds, almost a decade after the taxpayer bailed the bank out,” said Hargreaves Lansdown analyst, Khalaf.
Lloyds Banking Group last month said its first-quarter net profit jumped 72 percent as exceptional costs from a year earlier were not repeated.
The year-earlier figure was weighed down by a vast £790-million charge linked to the repurchasing of bonds launched after the global financial crisis.
The bank is meanwhile cutting 3,000 jobs this year, bringing to 12,000 the number of positions it has decided to axe since 2014, while — in a sign of its turnaround — the bank bought Bank of America’s UK credit card division MBNA for £1.9bn in December.