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Treasury withdraws retail sale of Lloyds shares

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The Treasury today announced that it has withdrawn the planned retail sale of its final 9.1% stake in Lloyds, blaming ongoing market volatility.

Having postponed the sale of the last tranche of government-owned shares in the banking giant in January, chancellor Philip Hammond today said the sale will be conducted via a trading plan to ensure it gets back all of the £20.3bn that taxpayers injected into Lloyds during the financial crisis.

The plan, which was initiated today and will remain in place for the next 12 months, involves gradually selling shares in the market over time, in an orderly and measured way.

The decision follows advice from UK Financial Investments (UKFI) that selling shares represents good value for taxpayers.

Hammond said: “I have listened to the experts. Ongoing market volatility means it is not the right time for a retail offer.

“Our plan will get back all the cash taxpayers invested in Lloyds during the financial crisis and leave the bank in a better place to continue the crucial role it plays in supporting individuals, families and businesses up and down the UK.”

Reacting to the announcement Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “While it is good news that the government is returning its remaining share of Lloyds Bank to private ownership, retail investors will be disappointed at being denied the opportunity to pick up a stake directly from the government at a discount.

“This would have been an opportunity to not only raise money for the Treasury but also to democratise retail investing. Share offers of this nature are an excellent mechanism for developing consumer interest in long term investments, so this decision to place shares via an institution hardly seems in keeping with the new government’s mantra of standing up for ordinary people.”

Investors can still buy shares in Lloyds on the open market via retail stockbrokers, McPhail added.