Huzzah! The Government’s stake in Lloyds Bank has finally fallen to below 21% thanks to another sell-off.
UK Financial Investments, the body set up to handle the state’s interest in banking, looks set fair to continue its steady programme of disposals for the foreseeable future.
Lloyds has caught the eye of certain institutional investors who are attracted by the prospect of a potentially huge dividend.
Panmure’s Simon French said today the forward earnings cover for the market is now at just 1.73 times. Income funds which rely on divvies have reason to fret.
Lloyds could help solve the problem having pledged to try to pay half its earnings out. Hence the interest in the shares?
All this would certainly appear to augur well for a future discounted sale to retail investors, promised by George Osborne.
It’s just that the best time to do it — given retail investors have votes and won’t thank a politician that loses them money — may actually be now.
But could there yet be a fly in the ointment?
Before each six-monthly dividend Lloyds needs Bank of England permission.
It could take a leaf out of TSB’s book of old slogans and become the bank that likes to say yes.
Shame watchdog-in-chief Andrew Bailey doesn’t have time to watch old ads.
