The government has just earned £500m from the latest round of sale of Lloyds Banking Group’s shares.
The sale has reduced the government’s stake in the bank to 22.98% from 40% in 2009. The total amount recovered from the bank has now topped £8.5bn.
Chancellor George Osborne unveiled a new trading plan in December 2014 (read more about it below). So far, the total amount of money raised through that plan has topped £1bn. This trading plan is set to end on 30 June.
The Chancellor George Osborne said:
“I am delighted that we’ve raised a further £500m for the taxpayer through the trading plan I launched in December.
“These sales are part of our plan to return Lloyds to the private sector and get taxpayers’ money back. The proceeds will be used to reduce the national debt.”
The bank said in a statement: “Today’s announcement shows further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back.”
The new sale comes as Lloyds announced that it had increased its statutory profits before tax by 325% since last year. Last month, it also announced that it will resume dividend payments for the first time since the crisis. Accroding to the chancellor, the dividend will provide the Exchequer with at least another £100m this year.
Why is the government selling Lloyds shares?
The government bailed out Lloyds Banking Group in 2008 after the bank had to write off up to £865m due to the US subprime mortgage crisis. The government took a 43.4% stake in the bank.
In 2013, Osborne announced plans to return bailed-out Lloyds Banking Group to the private sector.
The government then kicked off Lloyds share sales in 2013.
In December 2014, Osborne announced a trading plan which “involves gradually selling shares in the market over time, in an orderly and measured way”.
Read more about the share sale on here