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Expert comment on the Government selling 90 per cent of its stock in Lloyds PDF Print E-mail
Tuesday, 31 January 2017
John Thanassoulis, Professor of Financial Economics at Warwick Business School, said: "This is the real Brexit dividend. The collapse of sterling has led to increases in the stock market prices of many firms with foreign earnings. This has likely carried Lloyds up as it is the banker for many of these firms and businesses. The Government is being clever here in selling small tranches at a time when the opportunity presents itself.

"In contrast, there has not been a Brexit dividend from the RBS share price because the ongoing litigation in the US from the financial crisis continues to hang over the bank. The fines could be huge and they are preventing RBS from recovering. Lloyds has benefited from the Brexit bounce to recover to where it was before the referendum. This is enough for the Government to make a financial case to sell.

"The argument for selling RBS early was to convince investors that the UK Government was serious about handing back control to the private sector. Its actions with Lloyds have perhaps helped alleviate any doubt here, weakening the case to crystallise losses with RBS."

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