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LONDON, April 24 (Reuters) - The size of the stake owned byBritish taxpayers in Lloyds Banking Group has fallen bya further 1 percent to below 21 percent, the government agencyin charge of managing the interest said on Friday.
UK Financial Investments (UKFI) said the public shareholdingof HM Treasury in the British bank has been reduced to 20.95percent, in another milestone towards restoring the bank to fullprivate ownership.
News of the reduction comes less than two weeks before the aBritish General Election and shortly after Lloyds, rescued at acost of 20 billion pounds during the financial crisis, paid itsfirst dividend in more than six years.
The government has now sold more than half the 43 percentstake it took charge of following the bailout. To date, theshares have been sold to financial institutions such as pensionfunds and insurers.
"Today's announcement shows the further progress made inreturning Lloyds Banking Group to full private ownership andenabling the taxpayer to get their money back," a Lloyds BankingGroup spokesperson said in a statement.
"This reflects the hard work undertaken over the last fouryears to transform the Group into a simple, low-risk andcustomer-focused bank that is committed to helping Britainprosper."
The success of the UKFI's programme to sell down thetaxpayer stake in Lloyds is seen likely to boost efforts by theConservative Party to secure key government roles in a hotlycontested national election on May 7.
Finance minister George Osborne said on Sunday that heplanned to sell billions of pounds of government-owned shares inLloyds to small investors if the Conservatives win.
He said Britain would raise at least 9 billion pounds fromselling shares in Lloyds over the next year.
Lloyds said it would support plans. The bank madepreparations for a sale of shares to retail investors last yearbefore the government scrapped the plan following a decline inthe bank's share price. (Reporting By Sinead Cruise, editing by Nishant Kumar)
