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UKFI considers reducing stake in banks
UK Financial Investments (UKFI) is considering selling bonds that could be
eventually exchanged for shares in Lloyds Banking Group and the Royal Bank
of Scotland (RBS).
The bonds, which could be launched in June, would be converted into shares
once set price targets were met, which would ensure a profit for taxpayers.
Currently the average net investment in Lloyds 27.6 million shares is 63.2p,
resulting in a slim profit on the £20 billion invested into the institution
by the state. Shares in RBS are also moving closer towards breaking even.
This bond sale would be the first step in reducing the taxpayers' stake in
the two banks, which would gradually decrease over the next five years.
UKFI is also considering a public share auction, similar to those used in
the large scale privatisations of the 1980s.
