The size of the stake owned by British taxpayers in Lloyds Banking Group has fallen by a further 1% to below 21%, the government agency in charge of managing the interest said today.
UK Financial Investments (UKFI) said the public shareholding of the UK Treasury in the British bank has been reduced to 20.95%, in another milestone towards restoring the bank to full private ownership.
News of the reduction comes less than two weeks before the a British General Election and shortly after Lloyds, rescued at a cost of £20 billion during the financial crisis, paid its first dividend in more than six years.
The UK government has now sold more than half the 43% stake it took charge of following the bailout. To date, the shares have been sold to financial institutions such as pension funds and insurers.
"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 Banking Group spokesperson said in a statement.
"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," the statement added.
The success of the UKFI's programme to sell down the taxpayer stake in Lloyds is seen likely to boost efforts by the Conservative Party to secure key government roles in a hotly contested national election on May 7.
Finance minister George Osborne said on Sunday that he planned to sell billions of pounds of government-owned shares in Lloyds to small investors if the Conservatives win.
He said Britain would raise at least £9 billion from selling shares in Lloyds over the next year. Lloyds said it would support plans.
The bank made preparations for a sale of shares to retail investors last year before the government scrapped the plan following a decline in the bank's share price.
