UK Financial Investments, the body that controls the taxpayer stake in the nation’s bailed-out banks, has promised to drip-feed Lloyds shares on to the market in the runup to the general election, with the aim of cutting its stake to 20%.
The pace of selling has accelerated in recent weeks as UKFI moves to exploit a surge in the Lloyds share price.
Shares in Lloyds fell 0.6% to 80.92 pence following the announcement of the sale on Monday morning, but remained close to recent 12-month highs of 82.76 pence.
The government has been gradually cutting its stake in Lloyds down from 43% in 2009, after a taxpayer rescue pumped £20bn into the bank at the height of the financial crisis.
The latest £500m sell-off means that the government has recovered £8.5bn from share sales, the chancellor, George Osborne, said on Twitter.
Analysts at Investec said the Lloyds sale was “manifestly good news” for shareholders and taxpayers, noting that the bank’s shares were trading at a 12-month high.
The government still owns 79% of the Royal Bank of Scotland, which received a £45bn bailout in 2008, but Osborne has vowed to sell it “as quickly as we can” if he remains chancellor after the general election.
This article was written by Jennifer Rankin, for theguardian.com on Monday 9th March 2015 11.02 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010