Sept 17 - The UK government's £3.2 billion sale of a 6% stake in Lloyds begins a lengthy process of divesting its bailout stakes. As David Pollard reports the sale is being seen as further proof the UK economy is on the road to recovery.
Five years ago - the collapse of Lehmans. It's memories of that - and of the ensuing crisis - the UK government hopes to banish with a brighter message of economic recovery. What better way than a £3.2 billion pound share bonanza in one of Britain's bailed out banks? The sale of a six per cent stake in Lloyds - a high street name that goes back nearly a quarter of a millennium - shows things are getting better. UK finance minister, George Osborne. (SOUNDBITE) (English) UK FINANCE MINISTER, GEORGE OSBORNE, SAYING: "This is another step in the long journey of putting right what went so badly wrong in the British economy. It's another step in repairing the banks. It's another step in getting the money back for the taxpayer. " The UK government pumped over £20 billion into Lloyds in the wake of the financial crisis. The share sale takes the government stake down to just under 33%...... pocketing over £60 million profit and reducing the government's debt. The price asked: 75p a share - a small discount to its closing value the day before the announcement. And a healthy premium on the government's own break-even target of 61 pence. It's still only a seventh of what Lloyds shares commanded at their peak in 1998. But Schroders' Jessica Ground sees it as a sign of good things to come. (SOUNDBITE) (English) JESSICA GROUND, FUND MANAGER, SCHRODERS, SAYING: "It's very important for the government that they got a profit, and I think it's very interesting that they only sold 6 per cent and there's over another 30 per cent to go. So they obviously feel quite confident that things are going to get better, because Lloyds is the most geared UK bank to that. And they'll have an opportunity when their lock-up expires towards the end of this year to make additional sales and additional profits." The lock-up period lasts for 90 days - after that shares are expected to be offered to the public. If successful, the government may then turn its attention to offloading its other big high street victim of the crisis - RBS. Given its problematic history - getting rid of an 81% stake may prove a far bigger challenge.