Taxpayer stake in Lloyds Banking Group cut to below 1%

The UK taxpayers’ stake in Lloyds Bank has been reduced to less than 1% after a further sell-off of shares.

Lloyds was one of the banks bailed out by the Treasury at the height of the financial crisis, with the then Labour administration spending £20.3bn for a 43% stake.

In government, the Conservatives have been moving towards returning the company to private hands and last week announced it had recouped all of the money used to rescue the lender.

UK Financial Investments (UKFI), which manages the process, has been selling off shares since 2014 and has now cut its holdings to 0.89%.

The remaining stake is expected to be offloaded within weeks, with any profit made going towards paying down the national deficit.

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The announcement comes just days after Chancellor Phillip Hammond admitted his department was preparing to sell off the taxpayer stake in Royal Bank of Scotland at a loss, telling MPs that "we have to live in the real world".

The UK taxpayer currently owns a 73% stake in the bank after it too was bailed out during the financial crisis at a cost of £45bn, or 502p a share.

But the value of the shares has since dropped and is hovering at around half that amount.

"Our policy remains to return the bank to private hands as soon as we can achieve fair value for the shares, recognising that fair value could well be below what the previous government paid for them", Mr Hammond said earlier this month.