Lloyds share sale ‘loses taxpayers £230m’

<p>The NAO stated that the share sale was still good value for money.</p>

A new report from the National Audit Office (NAO) has concluded that UK taxpayers lost out on as much as £230 million as a result of the recent share sale involving Lloyds Banking Group.

However, the NAO concluded that even though well over £200 million more could have been added to the public purse, the deal still represented good value for money for the taxpayer.

Part of the semi-nationalised Lloyds Banking Group was returned to the private sector earlier in the year as the government sought to recoup some of the money that was spent on saving the stricken bank in the middle of the credit crunch.

NAO head Amyas Morse said that the timing of UK Financial Investments (UKFI), which managed the sale of Lloyds stocks for the Treasury, was right.

"The sale took place when the shares were trading close to a 12-month high and at the upper end of estimates for the fair value of the business," he said.

Lloyds shares

In September this year, the sale of a six per cent stake in Lloyds Banking Group to institutional investors raised £3.2 billion for the Treasury, which retains almost a third (32.7 per cent) of the company, which it is hoping to sell in the coming months.

The NAO also noted that the share sale process ran quickly as a result of the decision to restrict it to institutional investors only. The government had paid 73.6p per share in Lloyds when the bank was bailed out, with the stocks then sold on for 75p.

Stocks in Lloyds Banking Group has risen slightly since the share sale went through and the share price of the company is slightly higher in the early stages of trading this morning (December 18th). At 09:00 GMT, its stocks were 0.12 per cent up for the day and shares were trading for 76.12.

Lloyds Banking Group was not the only bank to be bailed out by the government in the recession, as the state also took a stake in Royal Bank of Scotland to prevent it from folding.

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