The major US investment firm Blackrock is on track to become the biggest shareholder in Lloyds Banking Group, usurping the government which is selling down its stake in the bailed out the bank.
Blackrock, which describes itself as the world’s biggest fund manager with $5.1tn (£4.1tn) of investments, owns at least a 5% stake in Lloyds while the Treasury’s stake is on course to fall to below 6%.
The Treasury makes a disclosure to the stock market every time its stake in Lloyds falls by one percentage point and its most recent announcement last month showed its stake had fallen below 7%.
UK chancellor Philip Hammond has sanctioned sales below the average price of 73.6p a share at which taxpayers bought a 43% stake during 2008 and 2009, when Lloyds was rescuing HBOS. The shares closed on Friday at 65.9p.
Blackrock does not disclose its precise holding in Lloyds but in May 2015 stock market rules required it to inform investors it had crossed up through the threshold of 5%.
The slump in Lloyds shares forced Hammond to abandon his predecessor’s plan to offer the public cut-price shares in Lloyds, a bank which is focused on the domestic economy. A year ago, George Osborne had postponed the retail offering in the midst of a global stock market rout while Hammond called it off entirely after the vote for Brexit.
The government pumped £20.3bn into Lloyds and, even though it is now selling the shares below the average price paid for them,it has calculated it has received £17.5bn.
Lloyds has been trying to put its crisis-ridden past behind it. It announced last month it would spend £1.9bn buying MBNA, a credit card business, from Bank of America.
The government stake in Royal Bank of Scotland remains at 73% after Osborne sold off 5% in August 2015 at a £1bn loss.
This article was written by Jill Treanor, for theguardian.com on Sunday 8th January 2017 15.40 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010