Lloyds Bank said the Government will see a return of £21.2billion on its £20.3billion taxpayer-backed rescue investment – making a profit of £900million. At the height of the crash, taxpayers owned 43% of Lloyds.
The Government has been selling its stake in Lloyds for the past five years and its return to the private sector has been lauded by investors. They say that the removal of a forced seller eases some of the pressure on the share price – Financial Times reports.
Ministers have claimed that all public money used to bail out Lloyds has been returned. However, some critics claim the lost interest has not been taken into account.
The Government began selling off its stake in Lloyds in 2013 when it sold a £3.2billion chunk of shares to institutions and another portion in 2014. It then launched a process of ‘drip-feeding’ shares into the market under a programme run by Morgan Stanley. Last week, Neil Woodford purchased £200million of shares in Lloyds.
Lloyds’ Chief Executive, António Horta Osório, told BBC Radio 4's Today programme: “The fact that the Government decided to use taxpayers’ money, which is a last resort, to put £20.3billion in Lloyds at the time is evidence that the bank was in a very difficult situation.
“When I arrived six years ago the bank was in a very difficult financial situation and not focused on its customers in the UK.”
The bank’s share price closed at 71p on Tuesday, compared with the 73.6p per share the Government paid at the time.