Budget 2015: Bailout bank sales to raise £22 billion

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The taxpayer stake in Lloyds has already been cut from 40% to just below 23%. Osborne said he expected to raise a further £9 billion from the shares owned by the Treasury.

At today’s share price of 79.3p that would mean reducing the stake to about 7%.

This includes the 5% which investment bank Morgan Stanley is dribbling out into the market on behalf of UK Financial Investments, of which it has 3% to go.

 

Such a drip sale is unlikely for as much as another 12% of Lloyds because of the scale of the sale. Instead a retail offer is seen as a popular option for Osborne.

Osborne also expects to raise £9 billion from sales of mortgage portfolios from the former building societies now run by the so-called bad bank, UK Asset Resolution.

These have become more valuable as the economy has recovered, and last October UKAR sold a portfolio of home mortgages to a consortium controlled by JP Morgan for £2.7 billion, a modest £33 million over book value.

 

Osborne made no mention of selling any of the Treasury’s outstanding 80% stake in Royal Bank of Scotland. The taxpayer bailed out RBS to the tune of £45 billion in 2008 and 2009.

The levy on banks will be raised from the 0.156% it was set at for 2014 to 0.21%, which Osborne said would raise an extra £900 million.

He also said the banks would no longer be able to offset PPI mis-selling compensation and costs against their tax.

Source Article from http://www.standard.co.uk/business/business-news/budget-2015-bailout-bank-sales-to-raise-22-billion-10116806.html

March 18, 2015 |
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