Yahoo Finance Lloyds Share Sale Halted On Market Volatility
The Chancellor has delayed the sale of its final chunk of Lloyds shares this spring, blaming the move on "market turbulence".
George Osborne promised in last year's election manifesto to sell the Government's remaining stake in the troubled bank, equivalent to just under 10% of the company, to the public this spring.
However, he has told Sky News he has decided to delay the sale due to the sharp falls in markets in recent months.
Share (LSE: SHRE.L - news) prices have fallen by almost 20% from their peak, amid concerns about the slowdown in China and the fall in oil prices.
It (Other OTC: ITGL - news) has meant the Lloyds share price has fallen more than 10% below the price at which the Government would potentially make a profit in share sales.
Mr Osborne said: "I want to create a share owning democracy. It's also my responsibility to ensure economic responsibility so with these turbulent financial markets now is not the right time to have that sale.
"We will sell Lloyds to the British people but we will do so when the time is right."
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His comments may spark questions about another manifesto U-turn, following his change of mind over tax credits in the Autumn Statement.
The final chunk of the stake was expected to raise £2bn and tens of thousands of investors had registered interest.
A spokesman for Lloyds Banking Group (Other OTC: LLOBF - news) said: "The Government has already been able to progressively reduce its stake in the group from 43% to just 9% today, returning over £16bn to taxpayers at a profit.
"This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank.
"The timing of any future retail sale is a matter for the Government.
"Our focus is on moving the group forward so that it can continue to be profitable and deliver sustainable returns to all our shareholders."
Laith Khalaf, analyst at Hargreaves Lansdown (LSE: HL.L - news) stockbrokers, said: "This will be a big disappointment for the hundreds of thousands of investors who had queued up for a chunk of Lloyds, but taking a big loss on selling shares when markets are low was always going to be a bridge too far for the Chancellor."
