Lloyds Share Sale Draws Strong Response

Treasury sources say 62,500 people have expressed interest in registering for Lloyds Banking Group (Other OTC: LLOBF - news) shares after the Government announced at least £2bn worth of shares would be offered to the public.

The Government has confirmed plans to sell the shares next spring , with a discount of 5% on the market price of shares and one bonus share for every 10 purchased and held for a year.

An analyst has predicted that investors stand to pocket up to £200 in a year from the first £1,000 invested.

Hargreaves Lansdown (LSE: HL.L - news) senior analyst Laith Khalaf said: "Based on £1,000 invested, you could expect a £50 price discount, an anticipated £50 dividend in 2016 - if the market price remains at today's level at the time of the sale - and a further £100 in bonus shares a year down the line," he said.

"Of course the dividend is not guaranteed, but that still looks like a pretty attractive package."

The sale is the latest phase of the Government's drive to exit from its shareholding in the group in the coming months.

More than £20bn in taxpayers' money was pumped into Lloyds to try to prop up the bank at the height of the global financial crisis.

The Government has been gradually selling off shares to institutional investors, but next year's sale will be the first chance for the general public to get involved.

Chancellor George Osborne told Sky News: "We've got a big task here, which is to finally get the British Government out of owning great chunks of our banking system.

"We've made a lot of progress with Lloyds, but this final chunk, this final sale, will be the biggest privatisation in over 20 years, and I don't want all of those shares to go to City institutions.

"I want them to go to members of the public."