LLOYDS has recovered sufficiently that the government could sell its stake in the bank imminently, officials told George Osborne yesterday.
City A.M. understands that UK Financial Investments, the agency responsible for handling the taxpayers’ stake in the bailed out banks, is in the final stages of assessing the possibility of a sale.
But Treasury sources argue there is “no rush” to sell the 39 per cent holding in the bank.
Lloyds’ share price has risen from 24p a year ago to 74.3p yesterday, well above the 62p needed for the government to break even on the bailout.
Last week the bank swung back to profit and chief Antonio Horta Osorio said he has restored Lloyds to a position where it can be returned to the private sector.
And UKFI agrees, with insiders saying no major hurdles remain.
Investment bankers from JP Morgan are looking at the best time for a sale, though the final decision rests with Osborne.
“We are getting closer to a sale – no date has been set yet because it is best to have the flexibility to move quickly if necessary,” said a source. “It could happen at any time over the next months.”
The stake is expected to be sold in several tranches, beginning with a sale to institutional investors, with retail investors getting the chance to snap up shares later.