Lloyds Banking Group moves from a trot to a gallop back towards reprivatisation

Yesterday, nearly five years after the British government bailed out Lloyds Banking Group with an emergency injection of £1bn of capital in return for a stake of over 40%, saw the start of what analysts believe will now be a relatively quick phased exit from the bank.  The initial sale of 6% of the state’s shareholding, which raised just over £3bn, will, according to chancellor Mr George Osbourne, “return money to (British) taxpayers that can be used to pay down the national debt”. Lloyds Banking Group declared a return to profit in August of this year and yesterday its share price closed at 77.3p compared with a low of 22p back in November 2011.

Things are not looking quite so rosy for RBS, the other British bank that the government bailed out with an incredible £45bn investment at the same time. As it stands, the government still holds over 85% of the bank, and the stable door appears still to be very much shut and bolted to HM Treasury in terms of a short to medium term return on “investment”.