Govt shelves sale of Lloyds shares to public

The Chancellor of the Exchequer has shelved George Osborne's plans to sell the remainder of government-owned Lloyds shares to the public, saying what matters is that the public does not make a loss on the investment.

Speaking on the fringes of the International Monetary Fund meeting in Washington, Philip Hammond said that the remaining 9.1% of Lloyds shares would be sold through a "trading plan to offload them into the market rather than a retail offer".

The Chancellor also signalled that plans to sell the government's remaining stake in RBS (LSE: RBS.L - news) would be put on hold for the foreseeable future.

Mr Hammond said: "On the basis of the latest advice from UKFI I believe the best way to secure value for money for the taxpayer and secure all the money invested in Lloyds is through a trading plan to offload the shares into the market rather than a retail offer.

"Ongoing market volatility means this is not the right time to make a retail offer of the type previously proposed."

Asked about the government's shareholding in RBS, Mr Hammond said: "Looking at the market, looking at the current share price, looking at problems around the Williams-Glynn disposal and outstanding case with the US Department of Justice, it is clear that the disposal of RBS shares at a price that recovers the taxpayer's investment is not practical at the moment.

"The sensible investment strategy would be to hold those shares until those issues are resolved."