Lloyds shares sale moving closer
The sale of taxpayer-owned shares in Lloyds Banking Group looked to be a step closer despite the lender's £6.8 billion PPI mis-selling scandal sending it to another big loss.
Lloyds said it remained in the red with £570 million of losses in 2012 after taking more mammoth mis-selling provisions.
In a move further fuelling anger over bank bonuses, the group revealed a £1.5 million shares award for boss Antonio Horta-Osorio and said staff will share out a £365 million total pot.
But one of the conditions for Mr Horta-Osorio's payout is that the Government must have sold at least a third of its stake above 61p - the average price at which shares were bought during the bank's bailout in 2008. The target price is far lower than previously thought and raises the prospect of an imminent return to the private sector, with shares currently above 50p despite a 6% fall.
Fellow state-backed player Royal Bank of Scotland on Thursday also fuelled taxpayer hopes as it claimed the group would be fit for the Treasury to start selling down its 81% holding by the end of 2014, although the Government stressed it had no timetable for a stake sale.
A Treasury spokesman said: "The Government's strategy remains to see Lloyds continue the progress it has made in reforming itself into a strong and sustainable bank that supports the British economy, which in time can be returned to full private ownership.
"Today's results show that it is making strong progress in improving its core underlying performance and strengthening its balance sheet, but that there is still work to be done as it continues to deal with the legacy of the past."
Lloyds was the top-performing FTSE 100 stock last year after shares surged 80% in 2012 and Mr Horta-Osorio said he was "very confident" taxpayers will recoup their cash.
On an underlying basis, the results showed group profits surging from £638 million to £2.6 billion in 2012, but bottom-line losses came as it set aside another £1.5 billion for compensation relating to payment protection insurance (PPI) and another £310 million for interest rate swap mis-selling claims in the fourth quarter alone.
Total mis-selling provisions have now reached £6.8 billion for PPI after Lloyds put by £3.6 billion in 2012, with £400 million overall for the swaps scandal.