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Lloyds stake sale raises £4.2bn Lloyds stake sale raises £4.2bn
(about 3 hours later)
The government says it has raised £4.2bn through the sale of a 7.8% stake in Lloyds Banking Group. The government has sold a second block of its shares in Lloyds Banking Group overnight raising £4.2bn.
UK Financial Investments, the body that manages the UK's stakes in Lloyds and Royal Bank of Scotland, sold 5.6 billion shares at 75.5p each. Lloyds shares fell almost 5% in early trading, falling to 75.5p, the price at which the 7.8% block was sold.
The sale cuts the government's holding in the bank to 24.9%, down from 39% in September when it began to sell shares. The sale cuts the government's holding in the bank to 24.9%, down from an original 39% .
The price remains above the average 73.6p a share the government paid to rescue the bank in the autumn of 2008.
The sale price is only 0.5p a share more than the price achieved in September when it sold a 6% stake raising £3.2bn.
Profits
The chancellor said the sale was "good value" for the taxpayer, and the money would be used to cut the national debt.The chancellor said the sale was "good value" for the taxpayer, and the money would be used to cut the national debt.
"It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer's money back," George Osborne said."It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer's money back," George Osborne said.
Lloyds shares were the worst performers on the London stock market in early trade falling almost 5% to match the price at which the block was sold.
However, it remains above the average 73.6p a share the government paid to rescue the bank in the autumn of 2008.
But it is only 0.5p a share more than the price achieved in September last year when a 6% stake was sold, raising £3.2bn for the Treasury.
Last month, Lloyds reported profits of £415m for 2013 against losses of £606m the year before - its first bottom-line profit since 2010.Last month, Lloyds reported profits of £415m for 2013 against losses of £606m the year before - its first bottom-line profit since 2010.
The government originally spent about £66bn in bailing out Lloyds and RBS in the 2008 financial crisis.The government originally spent about £66bn in bailing out Lloyds and RBS in the 2008 financial crisis.
UKFI is expected to try to sell off all the remaining shares it holds in Lloyds before the general election in 2015.UKFI is expected to try to sell off all the remaining shares it holds in Lloyds before the general election in 2015.