Osborne puts Lloyds Bank sale on hold until markets ‘calm down’

Chancellor of the Exchequer George Osborne has delayed the sale of the government’s final chunk of shares in Lloyds Banking Group (LON:LLOY), blaming the move on the market volatility seen in the past few months.

“I want to create a share owning democracy”.

George Osborne promised in last year’s election manifesto to sell the Government’s remaining stake in the troubled bank, equivalent to just under 10% of the company, to the public this spring.

The government had announced plans to begin a Tell Sid-style marketing campaign some time in the spring for a large retail sale of Lloyds.

The announcement poses questions as to whether the Chancellor will now put on hold any plans to sell its remaining stake in RBS.

Global markets have had one of their worst ever starts to a year in 2016 after concerns over China’s slowdown and slumping oil prices sparked widespread sell-offs.

The UK government had to buy a 43% stake in Lloyds for over £20 billion during the financial crisis after the lender got into financial difficulties after acquiring HBOS in a deal that was backed by the government at the time.

A return to profitability and dividend payments has helped to facilitate the gradual disposal of that stake since September 2013, though previous share sales have been exclusive to institutional investors.

“This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank”.

A Downing Street spokesman said: “It’s important that any share sale delivers value for money and we have to take account of current market conditions”.