Lloyds Banking Group gave the market and banking sector something to cheer about today as it came in with some decent numbers, but the one stat that stands out today is 73.6p. That is the average price that the UK Government paid for 39% of Lloyds back in the dark days of the credit crunch. The UK Government is now in profit on its "investment", or rather the UK taxpayer is.
Had the Government not intervened back than the chances are that Lloyds would have gone under. Certainly Halifax/HBOS which Lloyds took over after pressure from the last Labour Government in 2009 would have gone under. HBOS was effectively bust, having been one of the major players in handing out questionable mortgages to people they really shouldn't have given money to.
Looking at their charts today, it is difficult to get too enthusiastic about Lloyds hitting 74p as pre-financial crisis it was heading for 600p. And let's not forget that Halifax/HBOS was also a FTSE100 company back then and in 2007 it hit a high of 1150p. Long term buy and hold investors who hung on have been wiped out, but at least 74p is better than the 20p or so of a few years ago.
Still, the Government may now be thinking that sooner rather than later they may want to cash in their gain? The only problem is how do you sell 39% of a company the size of Lloyds into the market without seeing a big fall in the share price? 39% is a lot of shares to unload and I would have thought that any major buyer may want a discount. The one thing that isn't likely to happen is a generous sell off to the taxpayers that saved the company.
No comments:
Post a Comment