The British government has sold its last remaining stake in bailed out Lloyds Banking Group claiming to have made a profit, but that is disputed.
The British government has sold its last remaining stake in Lloyds Banking Group nearly a decade after it had to be saved from collapse with billions in taxpayers’ money.
The lender is the first of those that were bailed out to end partial state ownership in a symbolic step for the UK’s recovering banking sector.
Please to say Lloyds bailout has now been fully repaid and all taxpayers' money returned. £21.207B paid back on £20.313B injected.
— Philip Hammond (@PhilipHammondUK) May 17, 2017
At one stage the government owned 43 percent of Lloyds having spent over 20 billion pounds rescuing it.
“Six years ago we inherited a business that was in a very fragile financial condition,” Lloyds Chief Executive Antonio Horta-Osorio, who joined the bank in 2011, said in a statement on Wednesday. “Thanks to the hard work of everyone at Lloyds, we’ve turned the group around.”
Lord Blackwell, Lloyds Banking Group Chairman, discusses the Group’s return to
— LBGNews (@LBGNews) May 17, 2017
private ownership today https://t.co/A6yQOaWgXG#LLOY$LLOYpic.twitter.com/y3hEaQQ9Ab
The sale of the final shares means the state made a profit of 894 million pounds (1.042 billion euros) according to the bank and the British finance minister Philip Hammond. But experts point out that calculation does not take in to account inflation or fully factor in the cost of borrowing the cash to pay for the original bailout.
William Wright, managing director at New Financial, a think tank that promotes capital markets in Europe, said he calculated the government had actually made around a six billion pound (seven billion euro) loss on the transaction.
Once you factor in inflation over the past 9 yrs & cost of funding the £20.3bn bailout the current cost is closer to £28bn = a big loss 2/4
— William Wright (@Williamw1) May 16, 2017
So far about half of the money has been recovered that was used by the UK government to rescue five banks during the financial crisis. At the time the bailout cost taxpayers around 137 billion pounds.
Lloyds is back in private ownership, drawing to a close one of the largest bailouts of the financial crisis https://t.co/7ctcIg9fhApic.twitter.com/xN2UlDDpev
— Financial Times (@FT) May 17, 2017
British lenders’ long road back to public ownership contrasts with other countries such as the United States, where lenders such as JPMorgan, Bank of America and Citigroup repaid the government by the end of 2009.
Lloyds is out of state hands. Here's why that's no cause to be rejoicing #GE2017https://t.co/k7kWA3QEMj
— Scott Nelson (@SocialistVoice) May 17, 2017