Britain reduces stake in Lloyds Banking Group to 15.9 percent

LONDON, July 2 (Reuters) - Lloyds Banking Group said on Thursday that the government had reduced its stake in the bank to 15.9 percent from 16.87 percent previously, in a further step towards its full privatisation.

Lloyds was rescued during the 2007-9 financial crisis at a cost of 20.5 billion pounds to taxpayers, leaving the government with a 43 percent stake in the bank.

Britain's finance ministry began selling off its stake in September 2013 and Lloyds is on track to return to full private ownership in 2016.

(Reporting by Matt Scuffham, editing by Sinead Cruise)