Lloyds Banking Group's chief executive Antonio Horta-Osorio said a return of the bank to full private ownership was "within sight".
The bank CEO also praised a plan that allowed the UK government to sell shares in the open market.
The government has reduced its stake in the bank, bailed out during the 2007-9 financial crisis, to 18% from 43%.
The rate of its selldown has accelerated this year after Morgan Stanley was mandated to sell shares through a trading plan known as a "dribble-out".
"I personally think that the dribble-out was a really smart thing to do because it enabled the government to sell without any concerns about inside information," Horta-Osorio told the British Bankers Association's annual retail conference.
"It's just a blind programme where they sell 15% on average of daily volumes and they have increased the number of shares sold at higher prices without discounts," he explained.
