Lloyds Banking Group Plc (LLOY) advanced in London trading, exceeding the price at which the government says it will break even on its holding after providing a 20 billion-pound ($30.5 billion) rescue almost five years ago.
The stock gained 1.9 percent to 62.09 pence as of 11:13 a.m. in London, surpassing the government’s 61 pence break-even price. The stock has more than doubled in the past 12 months.
The gain puts Chancellor of the Exchequer George Osborne in a position to start reducing the government’s 39 percent stake in the lender. Lloyds Chief Executive Officer Antonio Horta-Osorio told shareholders at the U.K. lender’s annual general meeting in Edinburgh yesterday he expects the bank will return to profitability this year, allowing the taxpayers to start getting their money back.
The government originally paid about 73.6 pence for its shares when it rescued London-based Lloyds after its takeover of mortgage lender HBOS Plc. Earlier this year, the Treasury reduced the price below which it would recognize a loss from selling its stakes in Lloyds and Royal Bank of Scotland Group Plc to take into account fees the companies have paid the state, officials with knowledge of the matter said in March.
Osborne, whose Conservatives trail behind the Labour Party in opinion polls, could use the proceeds of the sale to fund tax cuts or more spending before the general election, due in 2015.
Lloyds posted a near threefold gain in first-quarter profit as impairments for bad loans declined.
To contact the reporter on this story: Gavin Finch in London at firstname.lastname@example.org
To contact the editor responsible for this story: Edward Evans at email@example.com