Lloyds Banking Group returns to full private ownership
17 May 2017
Lloyds Banking Group welcomes its return to full private ownership, and announces continued commitment to Help Britain Prosper.
Successful delivery of strategy has enabled the Group to return more than £21.2 billion to the British taxpayer, repaying £894 million more than the original investment.
Group to remain committed to being a simple, low risk, UK focused bank well positioned for the future.
Lloyds Banking Group (“the Group”) welcomes the news today that the Government has sold its remaining stake, returning the Group to full private ownership. The sale has returned £21.2 billion to the taxpayer, £894 million more than the initial investment, including over £400 million in dividends.*
The sale marks the successful delivery of the Group’s strategy to transform itself into a simple, low risk, UK focused retail and commercial bank. Since the Government first acquired shares in 2009, the Group has repaired its balance sheet, reduced its cost base, cut complexity and international exposure, built and sold TSB, and addressed legacy issues. The Group returned to profitability in 2013 and resumed paying dividends in 2014.
Today, the Group is strong, safe and focused on meeting the rapidly changing needs of its customers. The Group is well placed to help Britain prosper, is the largest digital bank in the UK as well as being the highest payer of UK tax in the most recent PwC Total Tax Contribution Survey for the 100 Group, contributing over £11 billion since 2010.
This year the Group has confirmed new, ambitious targets as part of its 2017 Helping Britain Prosper Plan to help address pressing issues such as the housing shortage, lending to SMEs and apprenticeships and skills. By going beyond business-as-usual activities to empower people, businesses and communities - the Group believes it is well positioned to help Britain prosper while creating sustainable value for its 2.5 million shareholders.
António Horta-Osório, Chief Executive of Lloyds Banking Group said:
“Today the Government has sold its last shares in Lloyds Banking Group, receiving more money than was originally invested. Six years ago we inherited a business that was in a very fragile financial condition. Thanks to the hard work of everyone at Lloyds, we’ve turned the Group around.
But the job is not done. We’re going to continue to use our strong position to Help Britain Prosper.
If you own a small business, the Group can provide the finance you need to grow. If you want to achieve your dream of owning your first home, the Group can provide you with the right mortgage and if you want to learn and develop your career, we’ll help you through one of the 8,000 apprenticeship opportunities we are providing by 2020 across the UK.’
Lord Blackwell, Chairman of Lloyds Banking Group said:
“Today marks the final step in the rescue and rejuvenation of Lloyds Banking Group. The combination of our strong financial performance and the progress we have made towards our strategic priorities has enabled over £21.2 billion to be returned to the Government, more than repaying the amount that taxpayers invested. However, we are not complacent. While we are proud of the progress we have made over the last few years, we recognise there is still a lot to do to transform Lloyds Banking Group into the best bank for customers and play our full role in helping Britain prosper."
Notes to editors
* Lloyds Banking Group has returned £21.207 billion to the British taxpayer. This is £894 million more than the £20.313 billion originally invested in the Group.
About Lloyds Banking Group
Lloyds Banking Group is the UK’s biggest lender to SMEs, the leading mortgage provider to first time buyers and operates the UK’s largest digital bank.
The Group’s main business activities are retail and commercial banking, general insurance, and long-term savings, protection and investment. The Group provides services under a number of well recognised brands including Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows.
Lloyds Banking Group performance
- £21.2 billion returned to taxpayer - In 2008 and 2009 the UK Government provided financial support to the Group totalling £20.3 billion. Between 2013 and 2017 a total of £21.2 billion has been returned to the UK Government from sales of Government owned shares in the Group and from dividend payments.
- Stronger - The Group is now one of the best performing banks and was the top performing UK bank in the Bank of England’s 2016 stress testing of the UK banking system. The Group has a strong balance sheet position with pro forma CET1 ratio (post dividend) of 13.8% in 2016, up from 7.1% in 2010.
- Safer - In 2011 the Group was reliant on wholesale funding of £251.2 billion (of which around a half had a maturity of less than 1 year); in 2016 wholesale funding had been reduced to £111 billion (with only £35 billion with a maturity of less than 1 year).
- Simpler - Delivery of the Group’s simplification strategy has meant that 97% of its business is now undertaken in the UK. In 2010 the Group was operating in 30 countries; this has now been reduced to 6 countries.
- Most profitable UK bank - Between 2012 and 2016 the Group has seen the greatest share price appreciation among UK banks with the share price increasing by 140% between December 2011 and December 2016. The Group has paid nearly £5 billion in dividends to shareholders in last three years.
About Helping Britain Prosper
Launched in 2014, the Helping Britain Prosper Plan set out seven public commitments supported by 26 individual metrics, designed to address some of the biggest issues facing Britain. The Group has grown its understanding of these issues considerably over the past three years and, as with earlier Plans, has adapted its 2017 Plan to ensure it is even more powerful and in tune with todays market.
The 2017 Helping Britain Prosper Plan is more streamlined and the focus remains on how the Group can best help Britain. Five areas of focus have been identified as the biggest social and economic challenges to which the Group can respond including developing a new environmental target to incentivise low carbon commercial property development.
The 2017 Helping Britain Prosper Plan commits to:
o Creating 8,000 apprenticeships leading to permanent jobs by 2020
o Lending £10 billion to help people buy their first home in 2017
o Lending £2 billion to SMEs in 2017
o Helping 100,000 businesses to start up in 2017
o Supporting 10,000 charities through our independent charitable foundations by 2020
o Supporting Credit Unions with £1 million of capital funding in 2017