All of the remaining shares held by the Government in Lloyds Banking Group PLC (LON:LLOY) will be sold shortly, Philip Hammond has announced but on the stock market and not to the public.
The new Chancellor has abandoned a plan by his predecessor George Osborne to sell the shares to the public at a 5% discount saying: “Ongoing market volatility means it is not the right time for a retail offer.”
Investment groups expressed disappointment at the decision.
Tom McPhail, at wealth manager Hargreaves Lansdown, said: ”This would have been an opportunity to not only raise money for the Treasury but also to democratise retail investing.”
Hammond said the government would start to sell its 9.1% stake ‘shortly’ and that a trading plan would ensure the all of the £20.3bn that taxpayers injected into Lloyds during the financial crisis in 2008 would be got back.
““Putting in place a further trading plan represents the best opportunity to sell shares at a price which delivers value for money for the taxpayer.”
The trading plan would be in place for 12 months.
However, now was not deemed the time to sell any more of the UK taxpayer's 73% stake in Royal Bank of Scotland.
“It’s clear that the disposal of RBS shares at a price that recovers taxpayer’s investment is not practical at the moment,” Hammond said.
RBS won't be sold until the disposal of 300 Williams & Glyn's branches is agreed and the bank knows the extent of any fine it faces from the US Department of Justice over the mis-selling of mortgage-backed securities.
Lloyds shares fell 5.5% to just under 52p.