Government slashes stake in Lloyds Banking Group to under 9%

The Government has reduced its stake in Lloyds Banking Group (Other OTC: LLOBF - news) to just below 9% following a share sale worth over £340m.

It means the taxpayer now owns an 8.99% stake in the bank, down from the 43% share it held following the lenders bailout six years ago.

"Selling our shares in Lloyds and making sure we get back all the cash taxpayers injected into it during the financial crisis is one of my top priorities as Chancellor," said Philip Hammond.

Lloyds received a £20.5bn bailout from the taxpayer between 2007 and 2009.

So far the Government has recouped just under £17bn of taxpayer cash after it began selling off its stake in 2013.

"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 spokesperson said.

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

Earlier this month, UK Financial Investments Limited (UKFI), which manages the Government's stake in Lloyds, said it would resume share sales in a bid to return Lloyds to full private ownership over the next year.

However, the Government abandoned plans for a share sale to the public, instead choosing to offload the holding to institutional investors.

On Wednesday Lloyds announced it had set aside another £1bn to meet compensation claims for the mis-selling of payment protection insurance (PPI) in an attempt to draw a line under the scandal.