Market Investments Strategy


UKFI’s overarching objective is to manage the Government’s shareholdings commercially to create and protect value for the taxpayer as shareholder and to devise and execute a strategy for realising value for the Government’s investments in an orderly and active way over time within the context of protecting and creating value for the taxpayer as shareholder, paying due regard to the maintenance of financial stability and acting in a way that promotes competition.

 

Stewardship strategy


For all our investee companies, our engagement is focused on ensuring that their business strategies, performance, governance and risk-management are aligned to deliver sustainable value for the taxpayer. This approach is consistent with the best practice set out in the Financial Reporting Council’s Stewardship Code for Institutional Investors, which aims to enhance the quality of engagement between shareholders and companies. 

Our approach to the stewardship of the investments is also informed by active dialogue with a wide range of other institutional investors, with whom UKFI holds regular meetings. 

 

Disposal strategy


UKFI is responsible for devising and recommending strategies to HM Treasury for returning the banks to private ownership, realising value for the taxpayer and executing the chosen strategy.  

Further details of our disposals strategy can be found on page 13 of our Annual Report and Accounts 2014/15


Market Investments

UKFI aims to develop, maintain and where appropriate execute a strategy for the effective disposal of the shareholdings, taking into account relevant market developments, and to work with HM Treasury to ensure that the analytical frameworks used to assess the value for money and wider policy, operational and legal implications of individual transaction proposals remain robust.

An evaluation of value for money for the taxpayer is fundamental to our assessment of the structure, size and timing of any sales.
 

Wholly Owned Investments

UKFI actively engages with UKAR on the orderly run-down of its closed mortgage books with a focus on maximising value for the taxpayer. This includes reviewing UKAR’s business plan and balance sheet optimisation strategy; working with the company to execute balance sheet optimisation transactions; and monitoring UKAR’s approach to arrears management, impairments and cost efficiency.

QUICK LINKS

PRESS RELEASE
7th October 2016

Intention to sell shares in Lloyds Banking Group plc through a trading plan
UKFI today announces that it intends to continue to sell Her Majesty’s Treasury’s (“HMT”) shareholding in Lloyds Banking Group plc (the “Company”) over the next twelve months through a pre-arranged trading plan that will be managed by Morgan Stanley & Co. International plc (“Morgan Stanley”).


PRESS RELEASE
17th May 2016

Dividend payment received today
UKFI announces that HMT will today receive c.£130m in dividend payments, in respect of its shareholding in Lloyds Banking Group Plc. This takes total proceeds received from the Government’s investment in LBG to £16.888bn.