Lloyd’s Bank which was privatised by the UK government following the financial crisis on 2008, has been fully privatised again.
The UK government announced that it had sold it’s remaining shares in the bank, netting the UK taxpayer a £894 million windfall.
The UK government spent £20.3 billion purchasing a 43.4% percent stake in the bank in 2008.
A large factor in Lloyds needing to be bailed out by the UK government was the fact that it had been forced to take over the toxic loans of HBOS, when Lloyds had bought out it’s rival.
Lloyds had always been a boring bank – a quality which would have spared it the worst of the crisis had it not agreed to saddle itself with the fallout from years of risky commercial lending by HBOS, which turned sour in the great downturn.
That decision was widely thought to have been taken under pressure from Gordon Brown’s government, who hoped that a takeover could help HBOS avoid a government bailout.
It didn’t pan out like that, and the merger eventually cost chief executive Eric Daniels and chairman Sir Victor Blank their jobs.
They are both due to give evidence in an upcoming court case brought by Lloyds shareholders who claim they lost out as a result of the doomed merger.
The years in between have been marked by criminal scandals and £17bn of PPI mis-selling but the bank is now making healthy profits and paying dividends.
The government has had mixed success with its bank rescues.
It still owns 73% of RBS which is still losing money all these years later.
The Chancellor Philip Hammond recently hinted that he would be prepared to start selling off those shares at a loss.
You win some, you lose some.