Lloyds Banking Group

At the height of the financial crisis in 2008, the government recapitalised a number of british banks, one of which was Lloyds. Directly after this recapitalisation, the government owned 43% of Lloyds. The holding has come down to little more than 10% today after a number of sales to institutional investors. The government has committed to a substantial retail tranche when they finally exit. No firm date has been confirmed since the chancellor’s last announcement in January when he said:

“I want to create a share-owning democracy. It’s also my responsibility to ensure economic responsibility, so with these turbulent financial markets, now is not the right time to have that sale….We will sell Lloyds to the British people, but we will do so when the time is right.”

With markets as they are and the Brexit debate and referendum looming, it is unlikely that any sale will take place in the next few months. In addition, the government bought Lloyds shares at 73.6p and the Chancellor has confirmed that his intention is to sell shares at a 5% discount. That meant he could only make a profit if the market priced the stock at more than 77p.

The government has confirmed that:

“It is the government’s intention to fully exit from its Lloyds shareholding in the coming months, and as part of this at least £2bn of shares will be sold to retail investors. Members of the public will be offered a discount of 5% of the market price, with a bonus share for every 10 shares for those who hold their investment for more than a year. The value of the bonus share incentive will be capped at £200 per investor. People applying for investments of less than £1,000 will be prioritised”.

The Lloyds offer in brief

  • Stock available to individuals located in the UK
  • Discount of 5% on the market price
  • Applications for less than £1000 shares to be given priority
  • If you hold your shares for over a year you will receive an additional share for every 10 bought, up to a value of £200

Lloyds in brief:

Lloyds Banking Group is a leading UK based financial services group providing a wide range of banking and financial services, focused on personal and commercial customers.

The Group’s main business activities are retail, commercial and corporate banking, general insurance, and life, pensions and investment provision.

The Group operates the UK’s largest retail bank and has a large and diversified customer base.

Services are offered through a number of well recognised brands including Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows, and a range of distribution channels. This includes the largest branch network in the UK and a comprehensive digital, telephony and mobile services.

Lloyds Banking Group is quoted on both the London Stock Exchange and the New York Stock Exchange and is one of the largest companies within the FTSE 100.