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Government sells remaining stake in Lloyds with taxpayers set for £500m windfall

Lloyds Bank Group is now a fully private company once again after the government sold off its remaining 0.25% stake in the financial giant.

The announcement is expected today from UK Financial Investments, the firm which manages the government’s stake, that the bank has re-entered private ownership after the final sell off.

It comes eight years after the government funnelled £20bn into the ailing bank at the height of the financial crisis to rescue it from the brink of disaster, with the taxpayer owning as much as 43% of the bank at one point.

Its massive £4.3bn profit this year, which is its biggest in a decade, has convinced bosses and the government that the bank has finally turned the corner.

The rescue plan has not been without its own pain however, with 57,000 jobs culled from the banks operations in recent years, while Lloyds was also forced to swallow a £17bn bill for its role in the PPI scandal.

For the taxpayer, the benefits of the deal are slightly muddier. Ministers have said that all of the £20bn used to bailout the bank has now been returned to the Government’s coffers, although some have argued that the lost interest has not been taken into account.

Lloyds chief executive António Horta Osório claimed at the bank’s annual meeting last week that he expected the government to make a £500m profit on the sale of its stake, this is despite shares being sold off at below the average price the government paid for the bailout.

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