Sale of Lloyds stake earns the UK Government around £4.2bn

Lloyds Banking Group’s shares fell after the government sold a block of its shares at a discount, earning £4.2bn

The government recent stock sale reduced its stake in the bank to 24.9 percent, down from 32.7 percent. The Chancellor of the Exchequer George Osborne disclosed that the money would be used to reduce the national debt because the sale was of good value.

The chancellor outlined plans to allow small investors to buy up some of the shares, but City rules meant any sell-off to retail investors could not take place for at least 90 days.

“Lloyds is ready to go back into private ownership. The market, I think, is ready as well. I came to Lloyds three years ago to fix this bank and help taxpayers get their money back,” said the bank’s chief executive Antonio Horta-Osorio

Lloyds Bank reported a profit of £415m last month for 2013.Following the 2008 financial crisis, the British government through UK Financial Investments (UKFI) spent around £66bn in bailing out RBS and Lloyds.  

UKFI is currently ‘developing the best mechanism’ to allow the public to take part in the share sale.

“These preparations will allow those who rescued the bank to participate in its exit from government ownership,” The Guardian quoted Gordon as saying. “It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer’s money back,” added Osborne.

Before the 2015 general elections begin, UK Financial Investments is supposed to sell off all the remaining shares it still holds in Lloyds.