Government reduces stake in Lloyds Banking Group to less than 6%

The Government has reduced its stake in Lloyds Banking Group to less than 6%, meaning the taxpayer is no longer the group's largest shareholder and takes the lender one step closer to being returned to private hands.

UK Financial Investments, which manages the Government's stake in Lloyds, cut its holding in the lender by one percentage point. It means the taxpayer's stake in the bank now stands at 5.95%, with more than £18 billion being returned to Government coffers since the lender's £20.3 billion bailout.

It is the latest in a series of share sales by the Government, which said in October it hoped to offload its remaining shares in Lloyds within a year.

Lloyds boss Antonio Horta-Osorio said: "Today's announcement that the UK Government is no longer our largest shareholder is a key milestone in the journey of Lloyds Banking Group back to full private ownership, returning taxpayers' money at a profit.

"It also reflects the hard work undertaken by everyone at Lloyds 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".

The Government has progressively sold down its original 43% stake in Lloyds and Chancellor Philip Hammond ditched plans for a share sale to the public in October, opting instead to offload the holding to institutional investors.