Government sells additional stakes in Lloyds

<p>The chancellor says he hopes the sale of shares in the banking group to be complete by the end of the year.</p>

The UK government has sold one per cent of its stake in the Lloyds Banking Group, bringing government ownership of the bailed-out bank to less than 13 per cent.

At the peak of the financial crisis, Lloyds needed £20.5 billion of taxpayer money to avoid collapse. The bailout left the government with a 43 per cent stake in the company.

In 2013, the Treasury started selling its stake in Lloyds and has been slowly releasing shares into the market via a trading plan. According to UK Financial Investments, which manages the government's stakes in Lloyds and Royal Bank of Scotland, the most recent sale has reduced the government's holding of the bank to just 12.97 per cent.

This most recent sale also brings the total recovered by taxpayers to £14.5 billion.

Sale hoped to be complete by end of the year

Chancellor George Osborne explained that he is determined to keep sales of Lloyds shares going, as this brings the stakes back to the private sector and puts money back into the country.

"I am determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt," he said.

He reiterated this comment with a tweet: "Delighted that we continue to get taxpayers' money back through Lloyds share sales, taking total now to £14.5 billion."

According to Reuters, Mr Osborne also said that he wants the government out of the UK banking system.

"I hope that [the sale of Lloyds] will be complete within the year," he said.

A spokesman for Lloyds said: "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."

Sale of shares in the Royal Bank of Scotland will take longer, however. Earlier in August, the chancellor ordered the first sale of government shares in RBS – but at a loss of around £1 billion.

This morning (August 24th), shares in Lloyds bank opened down around 3.5 per cent at 73.11p.

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