Britain’s finance ministry said it will sell at least 2 billion pounds ($3 billion) worth of shares in Lloyds Banking Group to private retail investors in spring 2016 to return the bank to full private ownership.

The sale is set to be the biggest privatization in Britain since the 1980s, when Margaret Thatcher’s government sold 3.9 billion pounds worth of shares in British Telecom and 5.6 billion pounds worth of British Gas shares.

As well as raising money to pay down Britain’s debt, those sales aimed to encourage ordinary Britons to invest in the stock market, an aspiration shared by the current Conservative government, which gathered for its annual party conference in Manchester on Sunday.

“This final sale will be the biggest privatization in over 20 years and I don’t want all those shares to go to City institutions. I want them to go to members of the public,” finance minister George Osborne told Sky News on Monday.

Market sources said the shares are likely to be attractive to retail investors because of the high dividend yield they are expected to offer in the coming years.

The bank was one of the biggest dividend payers in the FTSE-100 before its 20.5 billion pound taxpayer-funded bailout during the 2007/09 financial crisis, which left the government holding a 43 percent stake.

Lloyds, which already has more retail investors than any other stock in Britain’s FTSE-100 index, paid its first dividend since its bailout earlier this year and is expected to ramp up payouts over the next 2 to 3 years.

“The buoyant interest in this share sale will only now accelerate with the terms finally on the table,” said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, which has 727,000 private clients.


However, Russ Mould, investment director at AJ Bell, the online investment platform backed by veteran investor Neil Woodford, said investors should only buy the shares if they felt comfortable with the long-term investment case for Lloyds.

“Growth is likely to be limited, as the UK is a mature and tightly regulated market, and cost-cutting can only take the bank so far,” he said.

Shares in Lloyds were up 1 percent at 0935 GMT.

The Lloyds shares will be offered to retail investors at a discount of 5 percent to the market price, with a bonus share for every 10 shares for those who hold their investment for more than a year. The value of the bonus share incentive will be capped at 200 pounds per investor, the Treasury said.

People applying for investments of less than 1,000 pounds will be prioritized, the finance ministry added.

Sources with knowledge of government thinking said the final sale will also include an offer to institutions such as insurers as pension funds.

Britain’s government has recouped almost three-quarters of the taxpayer cash used in the rescue of the bank through sales to institutions since September 2013. It now owns just under 12 percent of the lender.

Executives at Lloyds had privately favored a continuation of a trading plan that has enabled Morgan Stanley to sell almost 13 percent of the bank since December.

“The decision about any sale of the UK government’s shares in Lloyds Banking Group is up to the government,” the bank said on Monday.

Osborne is pressing ahead with the sale, seen as a symbol of Britain’s recovery from the financial crisis, despite opposition from some of Lloyds’ institutional shareholders, who have said it creates unnecessary costs.

“The government’s decision to press ahead with a retail offer is a political one,” said Investec analyst Ian Gordon.

Another factor behind the government’s enthusiasm for a retail offer may be the impending sale of its remaining 73 percent stake in Royal Bank of Scotland, a significant chunk of which may be sold to retail investors.

Sources with knowledge of government thinking say the finance ministry is keen for investors to buy Lloyds shares and benefit from the bank’s turnaround as that may encourage them to buy RBS shares too.

The move comes after Britain’s financial regulator said on Friday that it intended to set a 2018 deadline for people to claim compensation for mis-sold loan insurance or PPI, a decision that was seen as positive for Lloyds.

“The Treasury is unable to be too draconian about regulation for the foreseeable (future) and a stable regulatory backdrop has to be positive for the sector, along with the recent line in the sand for the PPI saga,” one of Lloyds 20 largest shareholders said.

($1 = 0.6575 pounds)