The government has confirmed the sale of its remaining stake in Lloyds banking group (LON:LLOY), eight years after bailing out the bank in 2009.
The government confirmed on Wednesday that it had agreed to sell its remaining portion of the bank, and is thought to generate £21.2 billion return on investment for the tax-payer.
At the height of the financial crisis, the government owned as much as 43 percent of the bank after initiating a bailout rescue worth £20 billion.
Lloyds chief executive António Horta Osório has insisted that the government has capitalised on its investment. He commented during an interview with BBC’s today programme:
“The fact that the government decided to use taxpayers’ money, which is a last resort, to put £20.3bn in Lloyds at the time is evidence that the bank was in a very difficult situation.”
He added: “When I arrived six years ago the bank was in a very difficult financial situation and not focused on its customers in the UK.”
Despite ongoing difficulties relating to a Payment protection insurance mis-selling scandal, Lloyds reported a its biggest profit in the last decade for the year with £4.3 billion.
After several years of difficulty, the latest turnaround for the bank has been attributed to extensive cost-saving initiatives under chief executive António Horta Osório.
At the time, Mr Horta Osòrio said:
“These results continue to demonstrate the strength of our customer focused, simple and low risk business model and our ability to respond to a challenging operating environment.” he said.
Under recent restructuring moves, the bank announced the closure of branches and similarly the losses of 57,000 jobs.
This contrasts the Royal Bank of Scotland (LON:RBS), which also received government investment during the height of the financial downturn. As of currently, the government maintains a 73 percent controlling stake of the bank, which has continued to struggle to generate profits in the last few quarters.
Consequently, last month current Chancellor Philip Hammond has conceded that the government may indeed be forced to sell its stake at a loss.