Shares in Lloyds to be sold to public in next 12 months

Shares in Lloyds Banking Group will be sold to the public within the next 12 months, the UK government has confirmed, after market turmoil forced Chancellor George Osborne to postpone the move at the beginning of the year. Plans for the share sale were outlined by Economic Secretary to the Treasury, Harriet Baldwin, who also confirmed Lloyds had made a further £130m dividend payment to the Government: "The government has already recovered over 80% of its original investment in Lloyds and today’s dividend payment takes the amount we’ve recovered from the bank to over £16.8bn."

The Government has confirmed it will sell its remaining stake in Lloyds Banking Group back to the public within the next 12 months after market turmoil forced Chancellor George Osborne to postponed the move in January.

Just over 9 pent of Lloyds is still in state hands after the bank was bailed out by taxpayers to the tune of £20billion at the height of the financial crisis in 2008.

Plans for the share sale were outlined in a statement by Harriet Baldwin, economic secretary to the Treasury, who also confirmed Lloyds had made a further £130million dividend payment to the Government.

Public offer: The Government will offer up shares in Lloyds Banking Group to the public within the next 12 months

Ms Baldwin said: 'The £130million we’ve received today marks another milestone in government’s plan to recover the money taxpayers were forced to put into Lloyds during the financial crisis.

'The government has already recovered over 80 per cent of its original investment in Lloyds and today’s dividend payment takes the amount we’ve recovered from the bank to over £16.8billion.

'I am determined to build on this success by making Lloyds shares available to the public this year, so that we can build a share-owning democracy and continue to reduce our national debt.'

In January, Osborne poured cold water on plans to offer up shares in Lloyds to the public again, saying 'now is not the right time.'

Osborne said 'turbulent markets' needed to 'calm down' before any sale of the shares could go ahead.

Officials had previously hoped to have the bank's shares put up for sale in a £2billion retail offer by the Spring.

In the general election campaign the Chancellor said he wanted to sell the Government's remaining stake within 12 months and with a 5 per cent discount to retail investors.

Putting the breaks on: In January Chancellor George Osborne cited market turmoil as the reason behind his decision to put the breaks on a public offer of Lloyds' shares

In practice, this would have meant that the Government would have only been able to make a profit on the shares if the market priced them at 77p.

In February, Lloyds revealed it suffered a 7 per cent fall in statutory pre-tax profits to £1.64billion, after taking a £2.1billion hit from the payment protection insurance scandal.

Despite the reported losses, Lloyds said it would pay out £2billion in shareholder dividends. The bank's shares are currently up 1.15 per cent or 0.77p to 67.44p.