Chancellor George Osborne has postponed the sale of the final stake in Lloyds Banking Group held by the government, blaming global turmoil in the markets and sluggish growth.
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‘We will sell Lloyds to the British people but we will do so when the time is right’.
The government had announced plans to begin a Tell Sid-style marketing campaign some time in the spring for a large retail sale of Lloyds.
But since then Lloyds’ share price has dropped as well as the trading environment for banks is now more demanding.
The UK government had faced a barrage of criticism last August when it sold off £2.1 billion in shares in Royal Bank of Scotland at 330 pence a share, which was around a third below the 500 pence a share average price it paid at the height of the banking crisis. That tactic reduced the taxpayer’s stake to around 10% of the bank.
“We’ll build a share owning democracy”. “The Government said in October the sale, which was expected to be completed in spring, would raise at least £2bn to reduce national debt by selling shares to private investors”.
But these plans have been thrown into disarray by the turbulent start to the year for global stock markets.
Lloyds said the timing of any share sale was a matter for the government.
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Hargreaves Lansdown analyst Laith Khalaf said the news would disappoint “thousands of investors who had queued up for a chunk of Lloyds”, which is forecast to pay a dividend yield in excess of 7 percent in 2017. To date, the government has recouped around 16 billion pounds.
