Taxpayers have finally sold their stake in Lloyds – nine years after rescuing the bank at the height of the financial crisis.
This morning the last of the Government’s stock will have been sold – resulting in a £500million profit from the £20.3billion bailout.
The landmark moment ends the rockiest chapter in the history of the 252-year-old lender.
Ministers were forced to rescue the bank in 2008 when it came close to collapse as the global financial crisis threatened to sink the world’s biggest economies.
This morning the last of the Government’s stock in Lloyds will have been sold – resulting in a £500m profit from the £20.3bn bailout
‘This is a long road that has lasted the best part of a decade,’ said Hargreaves Lansdown analyst Laith Khalaf, ‘but Lloyds is finally out of Government hands and back to being a normal bank.’
The Treasury has been gradually selling its stake since 2013, and last month made back the £20.3bn it had invested to keep the lender afloat.
That meant that every remaining share sold was profit for the Government.
At a shareholder meeting on Thursday, the bank’s chief executive Antonio Horta-Osorio, 53, said that the shares would all be back in private hands within days.
He said the state’s holding was down to 0.25 per cent and he expected it to make a £500million profit. ‘Six years ago, this was a bank in crisis,’ the Portuguese boss said. ‘We are now a strong, safe and UK-focused bank.’
Lloyds embarked on a disastrous £12billion takeover of toxic bank HBOS when speculators drove it to the brink. It only went ahead after the Labour Government changed takeover laws to permit the acquisition.
Then-prime minister Gordon Brown is said to have told Lloyds chairman Sir Victor Blank at a cocktail party that he would help force the takeover plan through.
But instead of stemming the collapse of the sector, the deal brought Lloyds to its knees.
In October 2008, one month after the HBOS tie-up was completed, bosses were forced to beg the Government for support, and Brown handed over £20.3billion of taxpayers’ money in exchange for a 43.4 per cent holding.
The following year, bosses stunned the City by revealing HBOS had made an £11billion loss.
Lloyds was later buffeted by a string of scandals including PPI mis-selling. After the bailout, Lloyds did not make another profit until 2010, and the share price only recovered enough for ministers to start selling their stake three years later.
Today’s announcement will inevitably fuel fresh speculation about the future of 53-year-old Horta-Osorio.
The married boss has previously been linked to the top job at HSBC, although his credibility suffered a blow last year after he was caught conducting an affair while he was on business trips.
Lloyds shares rose 1.1 per cent, or 0.76p, to 70.15p yesterday.