Lloyds Banking Group PLC (LON:LLOY) has revealed that the UK taxpayers’ stake in the lender has now fallen below 3%.
UK Financial Investments, which manages the government's stakes in bailed-out lenders, has reduced its holding in Lloyds to 2.95% following further share sales.
The UK Treasury’s shareholding is now approximately 2.104bn shares, down from the around 2.776bn shares it held when it last disposed of a tranche at the end of February, which was a day after the bank’s strongest results in over a decade.
The price at which the shares were sold was again not disclosed.
UKFI resumed the sale of shares in Lloyds last October, having halted them almost a year earlier because of stock market turbulence.
At the current sell down rate, analysts have estimated that Lloyds should be fully returned to private ownership by May.
Lloyds was rescued with a £20.5bln bailout during the 2007-09 financial crisis, which left the taxpayer owning 43% of the bank.
In mid morning trading, Lloyds shares were up 0.3p to 68.15p.
Finish Line in sight ...
Laith Khalaf, senior analyst at Hargreaves Lansdown said: ‘The Finish Line is now within sight for the UK taxpayer, who can look forward to recovering all the money pumped into Lloyds during the financial crisis. Meanwhile Lloyds continues to make ground in its quest to become a normal, fully privatized bank.”
He noted: “Lloyds’ share price was badly hit by Brexit; it plummeted by more than a third in the fortnight following the referendum result. Since then Lloyds has recovered much of its poise, thanks to some decent numbers from the bank itself and from the wider economy, and the shares now trade close to where they stood before the Brexit vote.
“The current share price is 68p, while on 23rd June 2016 the stock changed hands for 72p when the closing bell rang for the last time before the referendum result was announced.”
Khalaf added: “Based on the current Lloyds share price, selling its remaining stake in the bank would net the Exchequer somewhere in the region of £1.5 billion, comfortably taking it over the threshold needed to break even on the bailout.
“There’s also a tasty dividend coming in May, which could see the taxpayer pick up a further £47 million in cash, though that will depend on how much further the Treasury cuts its stake between now and 6th April, which is the qualifying date for the payment.”