Prospects improve for UK sale of Lloyds bank stake
By Matt Scuffham
EDINBURGH (Reuters) - Britain's largest retail bank Lloyds (LLOY.L: Quote) expects to return to profit this year, increasing the government's chances of selling its stake before the next general election in 2015.
Prime Minister David Cameron is keen to show that Britain's part-nationalized banks are recovering from the financial crisis and a sale of the 39 percent stake in Lloyds, at a profit, would allow him to claim at least partial success.
Lloyds is further ahead than Royal Bank of Scotland (RBS.L: Quote), 81 percent-owned by the government, in the battle to plug property-related losses and give taxpayers back the tens of billions of public funds used to bail the banks out in 2008.
"We expect us to return to profitability this year and to grow our core business, to realize our full potential to deliver strong, stable and sustainable returns for you, the shareholders, and to allow UK taxpayers' investment in the group to be repaid," Chief Executive Antonio Horta-Osorio told shareholders at the bank's annual general meeting in Edinburgh.
He said the bank would resume paying dividends "as soon as we are able".
Lloyds' shares were the best-performing stock in Britain's blue-chip FTSE-100 .FTSE index last year and they hit a two-year high of 60.5 pence on Thursday, closing in on the 61 pence level which the government regards as its break-even.
Royal Bank of Scotland's stock was up 3 percent at 316 pence, meaning the government, by contrast, was sitting on a paper loss of around 17 billion pounds.
Lloyds' executives declined to comment on the likely timing of a government share sale after the meeting, emphasizing that it was a matter for the government and UK Financial Investments (UKFI), which manages the government's stake. Continued...