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The UK government has recouped the £20 billion cost of the Lloyds bailout

Ben Moshinsky
Mark Carney and Philip Hammond

Reuters/Neil Hall

LONDON — The UK Treasury has recouped its £20.3 billion bailout of Lloyds Banking Group, almost four years after it began selling shares.

The calculations include both share sales and dividends, the Treasury said in a statement on Friday.

The government has a less than 2% stake left in the bank and intends to sell it within "the coming months."

Chancellor Philip Hammond said: “Recovering all of the money taxpayers injected into Lloyds marks a significant milestone in our plan to build an economy that works for everyone.

“While it was right to step in with support during the financial crisis, the government should not be in the business of owning banks in the long term. The right place for them is in the private sector and I’m pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds Bank,” he said.

The move follows on Hammond's comments from earlier this week that the government may sell its shares in Royal Bank of Scotland for less than the price it paid for them during the 2008 financial crisis. 

Hammond signalled that he was prepared to offload the government's stake in the bank, which has made a loss for nine consecutive years, for less than the 500p a share the Labour government paid at the time.

HBOS, which owned the Halifax and Bank of Scotland brands, suffered heavy losses in the 2008 financial crisis and neared collapse as its funding was cut off by the credit crunch.

It had to be rescued by a combination of a public bailout and a merger with Lloyds, costing the taxpayer around £20 billion in the early part of 2009.

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