Chancellor Philip Hammond has abandoned his predecessor's policy to sell part of the government's remaining stake in Lloyds Banking (LLOY) to retail investors at a reduced price, opting for a plan to drip-feed its stake to institutional investors. The government's 9 per cent holding will be sold gradually via a "trading plan", provided the share price is above a certain threshold.
Former chancellor George Osborne had originally announced that the shares would be sold to retail investors at a 5 per cent discount to the market price, plus a bonus share for every 10 they held for more than a year, up to the value of £200. Mr Hammond attributed the about-turn to market volatility, meaning a retail offer would not secure value for money for taxpayers. However, as some IC readers have commented, the abandonment of the retail offering could also be a way of avoiding political risk, given the unknown liabilities involved in investing in the bank prior to the completion of Brexit.
