Here we go again: more creative accounting as regards the Lloyds share price.
Time and again, UK Financial Investments -responsible for managing the government’s stakes in Lloyds (or the Treasury – they both have form), try to kid and con that the breakeven price to sell off the Lloyds stake is about £0.73 per share.
It is pure hokum of course but with depressing predictability, the UK press lap it up.
And they are at it again today.

The government’s remaining stake in Lloyds is about 24.9%. At the current share price of £0.73, the government’s stake is worth about £13bn.
In 2008, at the height of the banking crisis, the government acquired £20bn of shares in Lloyds at around £0.735 per share.
Since then, the government has pared down its shareholding with two placements priced at £0.75 and £0.755.
It is to be welcomed that the government is not rushing towards a populist privatisation to get Lloyds off its books at a loss.
In any event, as the Treasury recognises, such a sell-off would maximise its chances of success if and when Lloyds recommences paying a dividend.

But in the spirit of transparency and accuracy, perhaps the Treasury could consider giving taxpayers a more realistic figure at which it will achieve break-even in the Lloyds rescue.
Taking into account the government’s true cost of borrowing the bailout funds from 2008-(most likely) late 2015, a truer breakeven figure would be about £0.86 per share.

Such a price is wholly realistic and achievable ahead of the general election. Lloyd’s net interest margin is moving in the right direction; it has surely just about got its sums right, belatedly as regards PPI provisions with no more shocks in sight; the one biggie on thje horizon with its UK franchise is rightsizing the branch network.

And perhaps trying to catch up with Barclays and RBS as regards a compelling mobile banking offering.
Anyone who has endured the current, dismal web-browser Lloyds attempt at mobile banking will know what I mean.

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