Lloyds: £20bn taxpayer bailout repaid, says Hammond
The £20.3bn spent bailing out Lloyds Banking Group during the financial crash has been re-paid, UK chancellor Philip Hammond has said.
Nine years after the government bought 43.4% of Lloyds, a total of £20.4bn had been recouped - although that figure does not account for inflation.
The government began selling off its stake in 2013, and now holds just 2%.
Earlier this week, Mr Hammond hinted that the 72% stake in Royal Bank of Scotland may be sold at a loss.
The vast bulk of the money returned to taxpayers has come from selling tranches of Lloyds shares, which began in September 2013 with the offloading of a £3.2bn stake.
However, the government has also received £400m in share dividends from Lloyds as the group returned to health.
In February, Lloyds reported its highest annual profit in a decade, helped by a reduction in payment protection insurance provisions.
Mr Hammond, speaking in Washington on Friday, said: "Recovering all of the money taxpayers injected into Lloyds marks a significant milestone in our plan to build an economy that works for everyone.
"While it was right to step in with support during the financial crisis, the government should not be in the business of owning banks in the long term.
"The right place for them is in the private sector and I'm pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds Bank."
There were plans to sell off a large tranche of shares to the public rather than institutional investors, but this was scrapped last year, with then chancellor George Osborne blaming turmoil in global financial markets.
The government's remaining 2% in Lloyds is expected to be sold in the coming months.
'Elephant in the room'
Hargreaves Lansdown senior analyst Laith Khalaf said that although the share sell-off has taken far longer than expected, the remaining stake "can now be sold off as pure profit for the government".
He added: "Of the UK banks, Lloyds has cleaned up its act fastest since the financial crisis.
"For the Treasury, the elephant in the room is of course RBS, which required twice as much financial support from the taxpayer as Lloyds."
The bailout of RBS was worth 502p a share - or £45bn in total. On Friday, RBS shares were trading at about 239.8p.
Mr Hammond said on Wednesday that the government would return RBS to private hands "as soon as we can", but this might be at a price below what was paid.
"We have to live in the real world," he said.