Lloyds share sale in doubt following Brexit
The government may go back on its promise to press ahead with the public sale of shares in Lloyds Bank Group.
According to reports that surfaced over the weekend, market uncertainty following the Brexit vote has prompted new chancellor Phillip Hammond to consider abandoning the retail offer, which pledged to sell £4 billion worth of shares at a 5% discount.
Under the offer private investors were also in line for a loyalty bonus, of one additional free share for every 10 held, providing the shares were held for at least a year.
But according to the Sunday Times, citing city sources, the plan to offload Lloyds shares at a discount will prove costly, which may force Hammond's hand to abandon the share sale.
Banking sector hit by Brexit
A year ago the shares were worth 88p, but today they have slumped to 54p. The banking sector has been one of the biggest losers post-Brexit, and with interest rates falling to record lows profit margins will be put under further pressure.
Earlier this year former chancellor George Osborne delayed the planned sell-off due to market volatility. He had said that he wanted to sell the shares within 12 months following last May's general election.
If given the green light, the share sale was expected to prove popular. According to Hargreaves Lansdown 350,000 private investors had registered an interest in the proposed public offering.
This story was originally written for our sister publication, Money Observer.