Over 90 percent of the £20.3bn used to rescue the Lloyds Banking Group at the pinnacle of the economic downturn has been redeemed.
The announcement came as UK Financial Investment (UKFI) said that it has sold another 1 percent share in Lloyds – reducing its holding to a little lower than 5 percent.
This means that the Treasury has received £18.5bn which it can use to reduce national debt.
Philip Hammond has stated that: “The Treasury looks like it will recoup the money that it spent on the rescue.”
The Treasury is planning to foist off the remaining 4.99 percent stake by autumn. It still holds 73 percent in Royal Bank of Scotland shares, which has experienced large hurdles whilst recovering from the banking crisis.
RBS is still inflexible as a result of legacy costs; the bank recently announced an increase in provision at £3.1bn, for expected compensation from the US Department of Justice.
Simon Kirby, the Economic secretary for the Treasury stated: “Since we decided to sell the Government’s shares in Lloyds we have recouped more than 90 percent of the money invested into the bank by taxpayers because of the financial crisis.
“This is an indication that there is real progress taking place and I am glad that we are on course to return Lloyds to private ownership.”
Meanwhile, due to the latest failure in regulation RBS will enter into its ninth consecutive annual loss. The bank’s chief executive Ross McEwan blames this failure on having got into deep waters prior to the 2008 crisis. RBS has already suffered £50bn annual cumulative losses since taxpayers assisted in keeping the company afloat.
In a recent statement by Mr Hammond, he stated: “RBS will not be selling any shares until both of these issues have been resolved.”