45 Per Cent Profit Lloyds Bank Share Offer

How To Get 45% Profit on Lloyds Bank Shares Offer.

The Chancellor of the Exchequer, George Osborne, has confirmed that the government is going to sell £2 billion worth of Lloyds Banking Group shares to the general public in the Spring of 2016.

As part of the banking crisis (credit crunch) the government/taxpayer bailed out Lloyds Bank following its merger with Halifax Bank of Scotland Group (HBOS) to the tune of £20.5 billion. The government has already now sold £15 billion and its current holding of around £5.5 billion represents just over a 10% stake in Lloyds Banking Group.

In a move to encourage private investment and discourage wealthier investors the Chancellor said that priority will be given to people applying for less than £1000 worth of shares. The shares will be sold at a 5% discount to the market price and in addition for every 10 shares that you buy you will also receive a bonus share (i.e. 11 shares in total). The bonus share incentive scheme will be capped at £200 per applicant.

The maths

The current share price is around 77p per share and is expected to rise but if we do the numbers as at today:

If you invest £1000 you would buy 1367 shares at 73.15p per share (5% discount). This would mean potentially bonus shares of another 136 shares worth at today's share price of 77p = £104.72.

This would mean a total holding of 1503 shares x 77p = £1157.31. An overnight profit of 11.57%.

To achieve the maximum bonus shares of £200 per applicant (259 shares), you would need to be successful in applying for 2590 shares at a cost using today's share price of £1942.50. By applying for this amount of shares you would fall outside priority applications for less than £1000 worth of shares.

Comment

Whilst the deal may look attractive are we not just buying shares in a company that as taxpayers we already own? That said an overnight profit of 11.57% is clearly attractive although financial sector shares do carry a higher level of risk given the current economic turmoil.

Another idea for you – 45% profit

Personally buy £1000 worth of shares which overnight will be worth £1157.31. Then transfer these shares via an "in specie" stock transfer to your Self Invested Personal Pension (SIPP) and receive at source income tax relief immediately at 20% meaning the value of your pension fund will increase with a contribution of value of £1157.31 +20% tax relief = £1447. That is a whopping 44.7% return on £1000 invested. The numbers are even better if you are a higher rate taxpayer at 40% or an additional rate taxpayer at 45%.

How do I register?

You can register your interest to purchase Lloyds Bank shares at the following government website https://www.gov.uk/lloydsshares/location