Arab Today, arab today britain recoups £32bn from part sale of lloyds bank
Last Updated : GMT 12:12:10
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Britain recoups £3.2bn from part sale of Lloyds bank

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Arab Today, arab today Britain recoups £3.2bn from part sale of Lloyds bank

London - AFP

Britain earned £3.2 billion from selling six percent of Lloyds Banking Group, it said Tuesday, setting the part-nationalised lender on course for a full return to the private sector. The coalition government had on Monday launched plans to sell part of its stake in bailed-out LBG following a recent upturn in the bank\'s fortunes. UK Financial Investments (UKFI), which manages the state\'s bank holdings, said about £3.211 billion ($5.12 billion, 3.83 billion euros) was earned from the sale of about 4.3 billion LBG shares at 75 pence each to institutional investors. The banking giant was rescued at the height of the 2008 global financial crisis with £20 billion of taxpayers\' cash. LBG shares finished down 3.50 percent at 74.65 pence in Tuesday trading on London\'s benchmark FTSE 100 index, which closed 0.80 percent lower at 6,570.17 points. The government said the sale would allow it to reduce national debt by £586 million, adding that it was a key sign of Britain\'s recovering economy. \"This is another step in the long journey in putting right what went so badly wrong in the British economy, it\'s another step in repairing the banks, it\'s another step in getting the money back for the taxpayer,\" finance minister George Osborne said. He added: \"You have had investors from around the world investing in a British bank, and I think that is a sign that the British economy is turning a corner.\" Chancellor of the Exchequer Osborne, a member of Prime Minister David Cameron\'s Conservative party, authorised Monday\'s part sale. It comes after LBG, whose chief executive is Portuguese national Antonio Horta-Osorio, revealed in August that it had bounced into profit and was looking to resume shareholder dividend payments. The Conservative-Liberal Democrat coalition government\'s stake in LBG has meanwhile dropped to about 32.7 percent from 38.7 percent. Britain wanting to recoup taxpayers\' money The government is hoping to eventually recoup taxpayers\' cash ploughed into the group, which was created by a merger of Lloyds TSB and rival British lender HBOS amid the crisis. With HBOS at the time saddled with high-risk property investments, LBG subsequently received a vast state bailout under the then-Labour administration. Analysts said the partial sale provided a boost to Britain\'s troubled banking sector, which has also been hit by the Libor interest rate-rigging scandal and mis-selling of insurance products. \"With the UK (general) elections in 2015, the coalition government appear to be playing the re-privatisation of Lloyds strategically by gradually selling ahead of the elections -- the government has said the next stake sale will not be for another 90 days,\" said Joe Rundle, head of trading at ETX Capital. \"Putting the politics aside, the move to offload the six-percent stake is very welcome, particularly for the UK banking sector which continues to suffer from a mixture of scandals, litigation and poor reputation amongst the UK public.\" As part of its turnaround and to meet European Union competition criteria, Lloyds last week relaunched TSB as a standalone lender. LBG rebranded 631 of its British branches, calling them TSB, ahead of their stock market flotation planned for next year. TSB was a familiar part of Britain\'s banking landscape until Lloyds snapped it up 18 years ago. The government meanwhile holds 81 percent of Edinburgh-based RBS, which collapsed amid the 2008 crisis after its disastrous takeover of Dutch bank ABN Amro. Lloyds part-sale follows Lehman anniversary Britain\'s successful sale of Lloyds shares this week follows the five-year anniversary of the failure of US investment bank Lehman Brothers. Former Wall Street darling Lehman Bros collapsed on September 15, 2008, sending fierce shockwaves across global financial markets and sparking a devastating worldwide credit crunch. \"The (LBG) stake sale ... comes five years after the failure of Lehman Brothers,\" noted City Index analyst Joshua Raymond. \"As such, there is perhaps no better reference point for reflection as to just how far the UK banking sector has come since those dark days.\"

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