LONDON • The United Kingdom government sold its last remaining shares in Lloyds Banking Group, bringing Britain's biggest mortgage lender back into full private ownership almost a decade after it was bailed out in the depths of the financial crisis.
The Treasury made a profit of £894 million (S$1.6 billion) on its original £20.3 billion investment after disposing of its final 0.25 per cent in the bank, Lloyds said in a statement yesterday.
It said the sale marked the final step in its turnaround, although more work is required.
The bank's return to full independence follows efforts by chief executive Antonio Horta-Osorio to restore its profitability and financial strength, and is a symbolic moment for Prime Minister Theresa May as she pushes to win a bigger mandate from voters next month.
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The UK still owns more than 70 per cent of Royal Bank of Scotland Group and will probably make a loss on its stake on that lender when it is divested.
"There's always more to do and we have lots of plans for the future," Mr Horta-Osorio said in an interview on Bloomberg TV.
He said he will start preparing a fresh strategy in July to be presented to investors at the beginning of next year. Lloyds was up 2.2 per cent at 71.7 pence at 10.15am in London, bringing the increase for the year to about 15 per cent.
The government, which at one point owned 43 per cent of the bank, has gradually sold shares to investors through a trading programme run by Morgan Stanley announced in December 2014. BlackRock replaced the government as Lloyds' biggest investor in January.
Lloyds is growing net profits as charges for past misconduct abate.
Mr Horta-Osorio's help in returning the bank to full private ownership did not come without bumps in the road. He was the first British banking leader to offer compensation to customers who were wrongly sold payment protection insurance, resulting in more than £17 billion of charges for the bank.
Although he said that exiting the government stake is a "big milestone", he added that he must now complete the acquisition of the MBNA credit card business Lloyds agreed to buy from Bank of America, deliver the synergies he promised from the deal and invest in technology across the bank to boost profitability.