Government stake in Lloyds falls below 16 per cent after latest sell-off

The latest sale was of a one per cent stake for around £500 million, The Treasury said.

That means that the Government has now recouped around £12 billion of the £20.5 billion spent bailing out the lender at the height of the financial crisis in 2008.

For the last five months The Treasury has been steadily reducing its stake in Lloyds, having begun the year still owning 25 per cent of the stock.

The Government’s stake in the bank now stands at 15.9 per cent.

Chancellor George Osborne described the latest sale as “fantastic news” and added: “I am determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt.”

Last month, the Government confirmed it would launch a multi-billion pound “Tell Sid”-style share sale open to retail investors within the next 12 months, following a previous pledge by the Chancellor.

It is believed that the sale could take place next March after the completion in December of the current trading plan to sell down some of the Treasury’s stake to City investors, and following publication of the group’s 2015 annual financial results.

Lloyds shares are trading at around 86.4p, well above the 73.6p average price that taxpayers originally paid for them.

A spokesman said: “ announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back. This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper.”