U.K. Cuts Stake in Lloyds to Below 14% as RBS Sale Nears

The U.K. government lowered its stake in Lloyds Banking Group Plc to less than 14 percent as it pushed on with a plan to recoup 20.5 billion pounds ($32 billion) taxpayers spent to bail out the company.

The reduction in the holding to 13.99 percent from 14.98 percent reported on July 16 means the government has recovered almost 14 billion pounds, Chancellor George Osborne said in a statement on Monday. It owned 24.9 percent of the company in December, when the Treasury began to cut its stake in stages.

“I am determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt,” Osborne said.

The sale comes ahead of a planned offering to retail investors in the next year and the sale of shares in Royal Bank of Scotland Group Plc. U.K. Financial Investments Ltd., which manages the taxpayer’s 78 percent stake in RBS, could appoint investment banks to handle the sale on Monday, or another day this week, a person with knowledge of the matter said on Sunday.

The stake sold is worth about 595 million pounds, according to the share price Friday. The shares rose 0.4 percent to 83.56 pence at 9:22 a.m. in London, valuing the company at 59.7 billion pounds.

Lloyds said the success in selling the latest stake demonstrated progress made in restructuring the bank.

“This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper,” Lloyds said in a statement.

The government could recoup 5.3 billion pounds more than the money it injected into Lloyds, including cash and fees it received from the firm, Rothschild analysts estimated in a June report.

The bank reported first-half profit of 1.2 billion pounds last week, missing analysts’ estimates, as it took a 1.4 billion-pound charge for improperly selling loan insurance.

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