POLITICS
12/07/2013 07:11 BST

Treasury Considers Selling Off Lloyds Bank From September

PA
Chancellor of the Exchequer George Osborne uses a Lloyds Cashpoint machine to withdraw some money during a visit to a branch of Lloyds TSB on The Strand, in central London.

Treasury officials are considering selling up to half of the government’s £18bn stake in the Lloyds Banking Group, in a move to finally take the bank off the nation's books.

The sale of the government's stake in Lloyds, which had to be propped up by the taxpayer during the the 2008 financial crisis, could start as early as September.

The process would start with the government placing an initial 5-10% of their 39% stake in Lloyds with institutional investors, at a small discount from its share price.

The government would finish offloading its stake entirely by the end of 2014, with a second institutional sale early next year and another to retail investors afterwards, in plans reported by the Financial Times. The move would be carried out in several parts in order to better deal with share price fluctuations.

Lloyds’ share price has risen by more than 40% in the last three months to 66.25p, exceeding the 61p price the government’s shares are valued. The retail part of the government’s sale in Lloyds is set to be structured in the model of the 1980s BT and British Gas privatisations, which saw shares advertised to the general public in a “Tell Sid” campaign.

Treasury officials dismissed suggestions of there being a planned timetable for the sale of the Lloyds stake but said they would look to get the best value for the taxpayer.

Last month, Chancellor George Osborne said that the Treasury was "actively considering" how best to sell its stake in Lloyds.

The pay packages and remuneration of Lloyds executives have caused controversy in the past. Earlier this year, chief executive Anthony Horta-Osorio received a £1.5m bonus when the bank suffered losses of £570m.