Announced on Wednesday morning, the latest share sale means the Treasury has recovered £19.5bn of the £20.3bn of taxpayers’ cash used to prop up Lloyds during the financial crisis.
The government now holds 2.95% of the bank and expects to recover all of the money originally pumped in to save it in 2008 once dividends and fees are taken into account.
Economic Secretary to the Treasury, Simon Kirby, said: “Lloyds’ recent annual results show that we are in a good position to reduce our shareholding further and expect to recover all of the money taxpayers injected into the bank during the financial crisis.”
BlackRock replaced the UK government as Lloyds’s biggest shareholder following an earlier sale of shares in February this year.
Wednesday’s further sell-off comes amid an improving outlook for the bank, which reported a 158% increase in pre-tax profits to £4.24bn in its annual results, its largest pre-tax profits in more than 10 years.
Laith Khalaf, 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 privatised bank.”
However, while the Treasury has successfully recovered the money pumped into Lloyds, the “elephant in the room” is RBS, Khalaf added.
He said: “RBS soaked up £45.5bn of taxpayer funding during the financial crisis, more than twice the sum needed to prop Lloyds up. Progress has been slow at RBS, and the cost of US litigation still looms large in its immediate future.
“The RBS share price needs to double from its current level before the taxpayer breaks even on the bailout, and that isn’t happening anytime soon.”
