Chancellor extends Lloyds sell-off as Government stake falls below 19%

Chancellor of the Exchequer George Osborne.

Chancellor of the Exchequer George Osborne. - Credit: PA

Chancellor George Osborne has extended a plan to sell down the Government’s stake in bailed-out Lloyds Banking Group as it was disclosed that the holding has now been cut to less than 19%.

The Treasury has reduced its shareholding in Lloyds from 25% since the trading plan for a gradual disposal of the stock through Morgan Stanley was announced last December, raising almost £3.5billion.

It has now extended the plan, due to end on June 30, until December 31, as it was hailed a “huge success” by the Chancellor. It is likely to mean another chunk of around 6% of the stock sold into private hands.

The announcement came after the latest statutory stock market disclosure on the Treasury’s Lloyds holding, as it fell to 18.99%.

The Treasury said that during the trading plan so far shares have been sold for an average price of more than 80p, well above the average 73.6p originally paid for them.

It said it had now recovered more than £10.5 billion from the bank - which was rescued by taxpayers at the height of the financial crisis.

Mr Osborne has set out plans to sell £9 billion of Lloyds shares during 2015/16, including about £4 billion through a discounted offer to retail investors.

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He said: “The trading plan has been a huge success, with almost £3.5 billion raised for the taxpayer so far.

“This means we have now recovered over £10.5 billion in total - more than half of the taxpayers’ money put into Lloyds - and we now own under 19% of the bank. But we’re determined to get on with the job of returning Lloyds to private ownership.

“That’s why I’m extending the plan for six months so that we can make even more progress in returning money to the taxpayer and paying down the national debt.”

A Lloyds spokesman said: “Today’s announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back.

“This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper.”