Bank shares could be offered to 46m people

Grovelawn Financial News 29/06/2011

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RBS and Lloyds shares for sale?

Nick Clegg, the Business Secretary, has said he would like to see the general public offered free shares in our banks and has said that it would be open to everyone which could mean that up to 46 million people could qualify. The idea was first suggested in March by City firm Portman Capital and soon earned the support of the Liberal Democrats' Treasury Parliamentary Committee. Nick Clegg said proposals were at a "preliminary" stage and it would be some years before the banks were in a position to be returned to the private sector.

The proposals state that each taxpayer that is eligible to own shares could be offered up to 1,450 shares in RBS and 450 shares in Lloyds, RBS shares would start trading at 38.6p and Lloyds would start at 47.3p with the total amount at £770.

The treasury is looking to hold on to the money for shares for some time and the shares would only be available to re sell once the share price had gone beyond the original purchase price. Once the sale of the shares has gone through, the government would get its money back and any profit would be kept by the purchaser.

The Government would like to encourage free shares to the public because the general public owns 84% of RBS and 43% of Lloyds and should therefore be allowed to see a return on their investment.

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