The British government has reduced its stake in Lloyds Banking Group to less than 4 per cent as the lender moves a step closer to full private ownership.

UK Financial Investments, which manages the stake in Lloyds, cut its holding by around one percentage point. It means the taxpayer’s stake in the bank stands at 3.89 per cent, with more than £19 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 chief executive Antonio Horta-Osorio said: “We are pleased that Lloyds’ strong financial performance in 2016 has enabled the Government to further sell down its stake in the bank to below 4 per cent.

He said the £19 billion-plus returned to the taxpayer was alongside a further £2.2 billion in dividends paid to the bank’s 2.5 million shareholders, which was announced Wednesday. – PA