The UK government has sold another chunk of its stake in Lloyds Banking Group, taking its holding in the bailed-out lender below 22%. 

The latest disposal of around 1% of the group represents stock worth more than £500m at its latest market value. 

The announcement marks the latest milestone after the government said in December it planned an "orderly and measured" sell-off of up to 5% over six months, raising about £3 billion. 

This is being done in small parcels, rather than through larger tranches as had been done previously. 

No shares are to be sold below the price the UK government paid for them, which was 73.6 pence. Lloyds closed at 80.5 pence last night.

In addition to the dividend announced by Lloyds last month, the latest transactions suggest the Treasury has recovered about £9 billion of the £20 billion injected into the group at the height of the financial crisis. 

A pre-election sale of shares in Lloyds to ordinary members of the public was ruled out last year by the UK finance minister George Osborne, but in last week's Budget he pledged to sell a further £9 billion of shares. 

The Treasury's stake is now 21.99%, compared with 40% at the time of the bailout in 2008. 

The London stock market must be notified every time the government's shareholding in the bank crosses a one percentage point threshold. 

"Today's announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back," a Lloyds spokesman said. 

"This reflects the hard work undertaken over the last four years to transform the group into a low-risk and customer-focused bank that is committed to helping Britain prosper," he added.