Lloyds' chairman says government could sell out in a year

The chairman of Lloyds Banking Group said he believed the state-backed lender could be fully returned to private ownership within the next 12 months, more than six years after its £20bn government bailout.

Lord Blackwell said after the bank's annual general meeting on Thursday that "it's possible and would be very desirable" for the government to finish selling its holding in Lloyds in the next year.

"Whether the government can achieve that depends on the market conditions," he added.

The government announced this week that its stake in Lloyds had halved since the bailout, falling below 20 per cent and recouping £10bn of taxpayers' money.

Antonio Horta-Osorio, chief executive, told shareholders at the meeting that "the group has progressed further towards full private ownership".

A six-month programme to drip-feed Lloyds' shares into the market was unveiled at the end of last year.

UK Financial Investments, the body tasked with selling down the government's holding, is considering another six-month plan before launching a public sale of its remaining stake to individual investors.

Lord Blackwell said after the AGM that there could be a window for a retail offering this year, but that ultimately it is a decision for the government.

Lloyds confirmed plans to pay an interim and full-year dividend for 2015 at the meeting, after initially announcing its first payout since August 2008 in February.

Lord Blackwell said the resumption of dividends "reflects the transformation of the business over the past four years".

The 0.75p per share payout is "a modest figure but a symbolic development" he added. The bank forecasts a payout ratio moving to 50 per cent of earnings over the medium-term.

Nearly all of the bank's shareholders voted in favour of the dividend and the directors' remuneration package, despite a call from investor advisory group the Pensions & Investment Research Consultants, to vote against the chief executive's "highly excessive" pay.

Some 98 per cent of shareholders voted in support of the pay packet, which rewarded Mr Horta-Osorio £11.5m last year, including a £1m base salary and £7.4m under the long-term incentive plan.

Lloyds' board also came under fire from Keith Elliott, a shareholder, who accused the bank of treating the law as "simply advisory" over its dealings with customers involved in interest-rate swap mis-selling.

He alleged the bank had written clauses into settlement agreements that protected it from future claims in the event it was found to have acted fraudulently.

In response to Mr Elliott's claims, Lord Blackwell said misconduct had "absolutely no place in this bank".

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