Lloyds repays taxpayers for bailout – with £1m extra

Lloyds Banking Group has repaid taxpayers more than the amount used to bail out the bank during the financial crisis in 2008.

Lloyds repays taxpayers for bailout - with £1m extra

Taxpayers have recovered around £1m more than the £20.3bn they injected into Lloyds during the sub-prime mortgage crisis in 2007, which was followed by the government taking a 43.4 percent stake in the bank.

Speaking in Washington last Friday (April 21), the chancellor of the exchequer, Philip Hammond, confirmed the government has received £20.4bn since it began selling its stake in Lloyds in 2013, which includes both sales and dividends.

The government said it expects to exit its remaining shareholding of less than two percent in the coming months and that all proceeds from the sales are used to reduce the national debt.

Hammond 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.”

Between September 2013 and March 2014 the government began to sell its shares in Lloyds through two accelerated bookbuilds worth a combined total of £7.4bn. This type of bookbuild involves selling a large block of shares to institutional investors overnight.

A further £9.2bn of Lloyds shares were sold through a trading plan, which drip feeds shares into the market daily, between December 2014 and June 2016.

In October 2016, the chancellor launched a second trading plan which has so far raised more than £3.4bn. In addition to this, the government has received dividend payments totalling £0.4bn from Lloyds.