The first of the many steps towards the privatization of Britain's largest mortgage lender would see the UK government raising GBP60 million or USD95 million added to its coffers. In a statement today, the British goverment through UK Financial Investments Ltd sold 4.28 billion of its shares in Lloyds Banking Group Plc, or 6% of its issued stock, for GBP3.2 billion. The shares were sold at a 3.1% discount to yesterday's closing price at GBP0.750. However, the price was at a premium from GBP0.736 the Uk government bought for in a GBP20 billion bailout plan back in 2008.
According to Reuters, the GBP60 million profit could be used by Chancellor of the Exchequer George Osborne to fund tax cuts or help the government alleviate its other loss-generating assets before the 2015 general election.
In a statement sent via email, Osborne said, "Five years ago, the previous government used taxpayers' money to bail out the banks and I've been absolutely determined to get that money back for taxpayers so we can pay down debts. (The Lloyds exit profit) is another step in the long journey to repair what went so badly wrong in the British economy."
The sale would reduce the UK government's stake in the bank from 38.7% to 32.7%.
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