The UK Government has scrapped plans to let the public buy its shares in Lloyds Banking Group (LLOY) at a slight discount to the market price.
The Treasury says: 'We are withdrawing plans for a Lloyds retail offer. The Government wants to get the best possible return for the taxpayer. Due to conditions in financial markets and current share prices, a retail offer at this point in time would not achieve this aim.'
Morgan Stanley has now been asked to run a trading plan, whereby institutional investors will be offered the Government’s shares over the next 12 months.
The announcement says the shares may not be sold below a certain price determined by the Government to represent fair value, although no figures are disclosed.
Chancellor Philip Hammond comments: 'Returning Lloyds to the private sector is in the interests of the bank, taxpayers and the country as a whole. That is why exiting our stake in Lloyds in an orderly way and at the best possible price is one of my top priorities as Chancellor.
'I have listened to the experts. Ongoing market volatility means it is not the right time for a retail offer.
'Our plan will get back all the cash taxpayers invested in Lloyds during the financial crisis and leave the bank in a better place to continue the crucial role it plays in supporting individuals, families and businesses up and down the UK.'
The Government still has a 9.1% stake in the bank, having originally pumped £20.3bn of taxpayers’ money into the business during the financial crisis.
It says nearly £17bn has been recovered since it started to sell the shares in 2013.