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Britain sells more Lloyds shares

by Jonathan Adams

Britain cut its stake in Lloyds Banking Group (LLOY.L) to below 7 per cent on Tuesday in a fresh attempt to return the lender to full private ownership over the next year.

UK Financial Investments Limited (UKFI), which manages the government’s stake in the bailed-out bank, resumed share sales in October, having halted them almost a year ago because of market turbulence.

Lloyds said in a statement the government has reduced its stake in the bank by about 1 percentage point to 6.93 per cent.

Lloyds was rescued with a 20.5 billion pound taxpayer-funded bailout during the 2007-09 financial crisis, leaving the state holding 43 per cent.

Britain’s finance ministry said it has now recovered over 17.5 billion pounds of the 20.3 billion pounds taxpayer injected into the bank during the financial crisis, once share sales and dividends received are accounted for.

Finance Minister Philip Hammond is under pressure to recoup cash from its stake in Lloyds and fellow bailed-out bank Royal Bank of Scotland (RBS.L) to relieve a likely shortfall in the nation’s finances.

But some politicians and banking analysts have questioned whether restarting sales of the government’s residual stake in the middle of a slump in bank shares represented the best value for taxpayers.

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