The Treasury will no longer offer a discount to retail investors looking to buy shares in Lloyds Banking Group.
In an announcement today, chancellor Phillip Hammond has made a break with George Osborne’s plans to sell shares to members of the public, but will continue selling down its Lloyds Banking Group shares in a “pre-arranged trading plan” instead.
The UK government still owns a £3.6bn share in the bank in return for its financial crisis bailout assistance.
UK Financial Investments, the organisation set up to manage taxpayer holdings in bailed-out banks, says the trading plan will begin today and last no longer than a year.
UKFI says: “HMT has instructed Morgan Stanley that (a) up to, but no more than, 15% of the aggregate total trading volume in the company may be sold over the duration of the trading plan, and (b) shares may not be sold under the trading plan below a certain price per share that UKFI and the Treasury have determined represents fair value currently and continues to deliver value for money for the taxpayer.”
To date, the government has raised £16.9bn through selling Lloyds shares.
However, Hammond says that market volatility had led the Treasury to ditch the idea of a retail sale.
Hammond says: “I have listened to the experts. Ongoing market volatility means it is not the right time for a retail offer.”
“Our plan will get back all the cash taxpayers invested in Lloyds during the financial crisis and leave the bank in a better place to continue the crucial role it plays in supporting individuals, families and businesses up and down the UK.”