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March 27, 2014

British Government to Sell a Big Stake in Lloyds Banking

“The British government plans to reduce sharply its stake in the Lloyds Banking Group, another sign of the strengthening of the financial sector here.”

“Lloyds, a British lender, received a bailout of 17 billion pounds, or about $28 billion, from the British government during the financial crisis.”

“On Tuesday, U.K. Financial Investments, which manages the government’s holdings in Lloyds and the Royal Bank of Scotland, said it would to sell 5.35 billion of the shares it holds in Lloyds, or about 7.5 percent, in a placement with institutional investors. Based on Tuesday’s closing stock price, the sale would be worth nearly $7 billion. The sale will reduce the government’s stake in Lloyds to about 25 percent from about 32.7 percent.”

“Reducing the British government’s holdings in Lloyds and R.B.S. has been a priority for George Osborne, the chancellor of the Exchequer.”

“The government previously sold 6 percent of its holdings in Lloyds in September. The government holds about 81 percent of the Royal Bank of Scotland.”

“The latest sale comes as Lloyds’ has improved its results despite continuing legacy issues, such as the sale of payment protection insurance, a product that has cost the bank billions of pounds. (The bank took a £3.46 billion charge in the fourth quarter to compensate consumers wrongly sold the product.)”

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Read full New York Times article here.

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