Lloyds gains on UK government sale speculation

10th Sep 2013 15:44

Lloyds Banking Group's shares rallied on speculation the UK government could begin selling off its stake in the lender in September. The government is considering selling about a quarter of its 39% holding in the bank, sources told Reuters, adding that it could happen in the next seven to 10 days. The holding is worth about £5bn if shares sell above 73.6p each, the average price at which the government purchased them.Lloyds was bailed out by the government at the height of the 2008 financial crisis. Shares in the lender have more than doubled in value over the past 12 months. Shares will be sold via a placing to pension funds and insurers. The Treasury has knocked back private equity and sovereign wealth funds, according to the sources close to government.The report comes after Lloyds' Trustree Savings Banks (TSB) reopened on the high street Monday as a stand-alone brand.The new TSB bank encountered a technical glitch on its website on the first day of operation as a separate entity with customers reporting problems with their online accounts.Lloyds is disposing hundreds of branches under the new brand name to meet competition rules by the European Commission.TSB, which merged with Lloyds in 1995, will open 631 branches England, Scotland and Wales. It will make TSB the seventh largest bank in the UK.Shares rose 1.78% to 78.15p at 16:00 on Tuesday. RD