UK government cuts Lloyds stake to a quarter

25th Mar 2014 17:05

The British government is selling another tranche of its stake in state-backed Lloyds Banking Group, leaving it with a quarter of the bank.The agency that oversees the government's stake in the bank, UK Financial Investments (UKFI), said the sale would reduce the Treasury's shareholding to about 25% from 32.7%.UKFI said the shares would be sold through a placing to institutional investors.Bank of America Merrill Lynch, JP Morgan, Morgan Stanley and UBS have been appointed to act as book-runners.The taxpayer bailed out Lloyds and Royal Bank of Scotland in the financial crisis, resulting in the state taking stakes in both.But ministers have had more success in efforts to return Lloyds to the private sector than they have with troubled RBS, in which the government still has an 81% stake.Lloyds has undergone an overhaul involving about 15,000 job losses that was designed to re-focus it on lending to individuals and small businesses.Last month, Lloyds pledged to re-start dividend payments after reporting a 140% rise in 2013 underlying profits to £6.1bn, while bottom-line profits came in at £415m against a loss of £606m a year ago.The results included a £3bn charge for PPI insurance mis-selling, after it announced an extra £1.8bn in January, and £1.5bn of re-organisation costs.Lloyds shares closed 0.6p up at 79.1p in London while RBS rose 4.2p to 307.8p.PW