UK taxpayers will gain at least £500m in profit from the government’s bailout of Lloyds Banking Group as it sells off its remaining stake in the coming days.
Speaking at the bank’s annual general meeting in Edinburgh, Lloyds chairman Lord Norman Blackwell said that the government’s holding in the bank is now down to just 0.25 per cent, from 43 per cent at the height of the financial crisis.
The sell-off, which is expected to be completed next week, will mark a watershed moment in the UK banking sector, drawing a line under the financial crisis.
António Horta Osório, chief executive of the bank, said:
Taxpayers will get back at least £500m more than was originally put in to save the group in 2009.
The sell-off is a major milestone in Lloyds’ recovery. Under the chief executive, it has offloaded some £200bn of toxic loans acquired following its takeover of HBOS in 2009, and has removed more than £100bn of “cheap but very dangerous” short-term wholesale funding, Mr Horta Osório said.
The expected Lloyds profit far exceeds the estimated £100m by the Office for Budget Responsibility in March this year. It sits in stark contrast with Royal Bank of Scotland, which is 72 per cent backed by the government and is expected to be sold at a loss.
Chancellor Philip Hammond warned last month that achieving “fair value” for the sale of RBS shares “could well be below hat the previous government paid,” at 502p.
Lord Blackwell added: “There is no sense of complacency here that the job is done… we recognise there is still a lot to do to transform this bank.”