July 12 - The British government is preparing to sell about a quarter of its 39 per cent stake in Lloyds Banking Group later this year, and wants it to be seen as a significant milestone in Britain's recovery from the 2008 financial crisis. The government is keen for the sale to go ahead before next year's general election - but analysts say this means they may not get the best possible price. Kirsty Basset reports.
The British government is preparing to offload around a quarter of its 39 percent stake in Lloyds, the bank rescued by tax payers at the height of the 2008 financial crisis. The exact timing of the sale is not yet known, but it could begin in the weeks following its first half results on August 1, which are expected to show a sharp rise in profits. But not everyone's convinced that's the best time. Head of Trading at ETX Capital, Joe Rundle. (SOUNDBITE)(English) JOE RUNDLE, HEAD OF TRADING AT ETX CAPITAL SAYING: "I don't think the government will get the best price they can for Lloyds because it has become such a political tool. I think the major unload of the stock will be towards the election when they're either going to give free shares to people or reduce the headline tax rate and that's going to be done purely on political timing, rather than the best timing for the taxpayer in the long term." Sources say the stake will be sold off to pension funds and insurers, rather than private equity and sovereign wealth funds. Shares are trading comfortably above the 61.2 pence level the government regards as its break-even, and reached a two and a half year high early this week. Over the last three months shares have jumped more than 40 percent, valuing the bank at around $70 billion. The government is keen for the sale to be seen as a significant milestone in Britain's recovery from the financial crisis. But a sale of shares in Britain's other state backed bank, RBS, is unlikely in the foreseeable future, as the government looks at whether or not the bank should be broken up.