Shares in Lloyds hit government break-even priceFriday 17 May 2013 17.45
Shares in Lloyds Banking Group today rose above the level which the UK government regards as its break-even price following its £20.5 billion sterling rescue of the bank, raising hopes a sale could be imminent.
Lloyds shares rose 3.2% to reach 62.84 pence by the close of business, their highest for over two years and passing the 61.2 pence break-even price.
Although the UK government has not yet set a timetable for a sale, industry and political sources have said it wants to start selling when the shares are trading consistently above 61.2 pence a share.
Britain's finance ministry declined to comment.
Prime Minister David Cameron is keen to show that Britain's part-nationalised banks are recovering from the financial crisis and a sale of the 39% stake in Lloyds, at a profit, would allow him to claim at least partial success.
Shares in Lloyds have risen by 124% over the past year, outperforming a 25% increase in the FTSE 100 , making it the best performing stock in the blue chip index.
Lloyds chief executive Antonio Horta-Osorio told investors at the bank's annual meeting yesterday that the bank expects to return to profit this year for the first time since 2010. Any sale would be handled by UK Financial Investments (UKFI), which manages the government's shares in Lloyds and Royal Bank of Scotland.
Britain pumped a combined £66 billion into RBS and Lloyds to keep them afloat during the financial crisis. Since then, both banks have undertaken massive restructurings under new management and, bowing to pressure from lawmakers, focused on lending to UK households and businesses.
Selling Lloyds shares would be more straightforward for the government than offloading its stake in RBS, which would require selling at a loss or giving the shares away to taxpayers.
Cameron said this week he is 'open to ideas' over the disposal of the RBS shares. Britain is sitting on a loss of £9.2 billion from its investment in the bank.