Lloyds no longer owned by taxpayer as ministers sell final shares
The government has sold its remaining shares in Lloyds Banking Group, almost a decade after the £20.3bn bailout of the high street lender.
The sell-off of the taxpayer’s remaining shares in the bank – which owns Halifax, Bank of Scotland and Scottish Widows – is a major milestone in the recovery from the financial crisis.
At its peak, the government owned 43% of Lloyds but on Wednesday it is expected to be announced that the taxpayer is no longer on the bank’s shareholder register.
Philip Hammond, the chancellor, has already said the government has recouped all of the £20.3bn used to buy shares in Lloyds, which rescued HBOS at the depths of the financial crisis.
While Hammond’s figures do not include the £3.6bn cost of borrowing the bailout funds, the bank’s chief executive, António Horta-Osório, told last week’s AGM that the government would make at least £500m from the rescue.
The chief executive will now face questions about whether he intends to stay on at the bank, which he joined in 2011 and immediately started to tackle the payment protection insurance mis-selling scandal which has cost Lloyds more than £17bn.
The government still owns more than 70% of Royal Bank of Scotland, which received a £45bn bailout and is yet to make an annual profit since its 2008 rescue.
September 2008 A £12bn takeover of HBOS by Lloyds TSB comes just days after the collapse of Lehman Brothers sent shockwaves through financial markets. The Financial Services Authority, then the City regulator, says the deal will “enhance finance stability”.
October 2008 As financial instability mounts the government announces a bailout of the banking system. Lloyds TSB renegotiates the takeover of HBOS to 0.605 Lloyds TSB shares for every one HBOS share, from 0.833 a month earlier.
January 2009 Lloyds Banking Group is created from the purchase of HBOS by Lloyds TSB. The government begins the first of a three-tranche bailout of the group, pumping in £13bn.
June 2009 The government puts in a further £1.5bn.
December 2009 The government backs cash call, buying £5.8bn of shares. Total rescue deal amounts to £20.3bn. Taxpayer stake stands at 43%.
May 2011 Lloyds takes first provision for payment protection insurance of £3.2bn. The bank’s bill eventually tops £17bn.
November 2011 Horta-Osório takes leave, citing fatigue. He returns to work in January.
September 2013 The taxpayer stake gradually reduces from 43% to 39% for technical results. It is cut to 33% when a formal sell-off of Lloyds shares begins:£2.3bn of shares sold to big City investors at 75p a share.
March 2014 £4.2bn of shares sold at 75.5p, taking the taxpayer holding to 24%.
February 2015 Dividends to resume for first time since the bailout.
October 2015 Osborne unveils plans for a cut-price sale to the public.
October 2016 Philip Hammond, the new chancellor, abandons his predecessor’s pledge to sell cut-price shares to the public.