Britain cuts Lloyds bank stake to below 20%

Britain has cut its stake in state-rescued Lloyds Banking Group to just under 20 percent after offloading another chunk of shares, the government said Tuesday.

The Treasury announced in a statement that it has sold about 2.0 percent of Lloyds for another £500 million ($784 million, 697 million euros) under ongoing plans to return it to private ownership.

The sale -- which cuts the state's holding to 19.93 percent -- comes one week after the Conservatives won Britain's general election in a surprise victory.

The government has trimmed its stake by 5.0 percent in the past three months, raising about £2.5 billion.

Britain has now recouped more than half of the £20 billion in bailout funds pumped into Lloyds at the height of the 2008 global financial crisis. The government initially took a 39-percent share.

"These sales have only been made possible by our long-term economic plan, and we are determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt," added finance minister George Osborne.

The Chancellor wants to sell another £9 billion of Lloyds shares over the next 12 months, including about £4 billion through a discounted offer to retail investors.

"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," said a bank spokesman.

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

The latest shares were sold above the average price that the previous government had paid for them, which was 73.6 pence.

Lloyds shares were buoyed by the news, rising 0.48 percent to finish at 87.02 pence on Tuesday.

The broader London stock market however fell 1.37 percent at the close on Greek euro exit fears.

"With Lloyds offering ... an improved financial performance, there is a likelihood of a stronger share price going forward so that there may even be a profit for the taxpayer on the sale of the remaining 20 percent government stake," said Mark Taylor, professor of finance at Warwick Business School.