The taxpayer’s stake in Lloyds Banking Group PLC (LON:LLOY) has fallen below 7% after the Treasury sold off another slug of shares as it continues to attempt to return the lender to full private ownership.
In a statement today, Lloyds said the government has reduced its stake in the bank by about 1 percentage point to 6.93%, or to about 4.9 bln shares, down from 5.7 bln previously.
UK Financial Investments, which manages the government's stakes in bailed-out banks, resumed the sale of shares in Lloyds in October, having halted them almost a year earlier because of market turbulence.
READ: Goldman says 'sell' Lloyds
Lloyds was rescued with a £20.5bln bailout during the 2007-09 financial crisis, which left the taxpayer owning 43% of the bank.
The Treasury has now recouped over £17.5bln of that total, once the programme of share sales and dividends received have been accounted for.
Prior to the Brexit vote, which disrupted markets, the plan had been to offer the rump of the government’s shareholding to private investors, but the idea got dumped, in favour of selling the stake over a 12-month period to City institutions.
Chancellor of the Exchequer Philip Hammond is under pressure to recoup cash from the government’s stake in Lloyds and fellow bailed-out bank Royal Bank of Scotland to help shore up Britain's Brexit-battered public finances.
Lloyds' shares on the FTSE 100 index slipped 0.3%, or 0.2p lower to 61.2p in early morning trading today.
Lloyds’ shares closed trading at 62.5p each yesterday, up 1.8% on the day having shrugged aside some negative comment from Goldman Sachs, which reiterated its ‘sell’ rating on the stock.
The US broker said it is worried over the bank’s mortgage loan book, with the gap between Lloyd's rates and the rest of the market likely to lead to around 3% shrinkage in the second half of 2016 it believes.