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Lloyds to begin Government payback

Lloyds Banking Group will become the first UK state-aided bank to begin to pay bank its £4bn Government loan.

The bank has revealed that 87 per cent, or £3.6bn, of its open offer shares were accepted by shareholders last week. It will use these proceeds, along with cash reserves, to eventually pay back £4bn to the Government.

Shareholders accepted an offer to buy new shares at 38.43 pence each, a discount to Friday’s closing price of 66.2 pence.

The Government currently controls 43 per cent of the group after it allowed Lloyds into the asset protection scheme in January. This successful share offering will mean the state will only take the remaining rump of shares after shareholders are offered the last 13 per cent. The group says the State’s eventual share will be revealed “in due course”.

Initially the bank will buy back 3,475,284 shares from the Treasury, which could equate to around £2.3bn of the total amount owed.

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