US financial giant BlackRock has become Lloyds Banking Group’s biggest shareholder after the UK government dropped its holding in the group to below 6% for the first time since it took control following the 2008 financial crisis.
The UK government said in a statement released this morning that its plans to return Lloyds Banking Group to the private sector has passed “a significant milestone” as it was confirmed that it is no longer the largest shareholder.
The latest share sales, conducted through the trading plan, have reduced the government’s remaining shareholding to less than 6% and below the level of the next largest shareholder BlackRock.
The UK government said that these latest share sales mean the government has recovered over £18bn of the £20.3bn taxpayers injected into Lloyds during the financial crisis, once share sales and dividends received are accounted for.
The UK’s chancellor of the exchequer, Philip Hammond said: “Returning Lloyds to the private sector and recovering all of the cash the taxpayer injected into the bank during the financial crisis is a priority for the government.
“Confirmation that we are no longer the largest shareholder in the bank and that we’ve now recouped over £18bn for UK taxpayers is further evidence that we are on track to recover all of the £20bn injected into the bank during the financial crisis.”
The UK government’s trading plan involves gradually selling shares in the market over time, in an orderly and measured way. The Lloyds trading plan initially ran from 17 December 2014 to 30 June 2016. The government announced on 7 October 2016 that further sales of Lloyds shares would also be made through a trading plan.
As required by Financial Conduct Authority (FCA) rules, Lloyds Banking Group announced today that the government’s shareholding in the bank has crossed through a one percentage point threshold. This announcement therefore notifies the market that the government has reduced its shareholding in Lloyds to below 6%.
All proceeds from the sales are used to reduce the national debt, the statement said.
In an exclusive video taken at the InvestmentEurope Pan European Summit in Hamburg last Autumn, former UK chancellor Lord Darling revealed that the 11th hour rescue rescue of the Royal Bank of Scotland, Lloyds Banking Group’s parent company, stopped the global financial market from a total collapse.
In this video, below, Darling reveals that the world’s banking system was “just two hours” from going under.