Lloyds Banking: UK Government Cuts Stake to 13.99%

By Ian Walker

LONDON--The British government has reduced its stake in Lloyds Banking Group PLC (LLOY.LN) by another percentage point to 13.99%, the latest in a series of small sales of shares in the bailed-out bank.

Lloyds said Monday the government now owns 9.98 billion shares, or 13.99% of the bank's voting rights. It previously held 10.69 billion shares.

No price was disclosed for the share sale, which was conducted on Friday.

Lloyds, the U.K.'s biggest retail bank, was bailed out by U.K. taxpayers during the financial crisis, with the government taking a 39% stake. The government started selling its shares in Lloyds in late 2013.

After initially selling portions of Lloyds directly to investors through accelerated placements, in December the government mandated Morgan Stanley to gradually sell stock up to the end of June. On June 1, the program was extended to Dec. 31. The government also said previously it would launch a share sale that would be open to retail investors in the next 12 months and that details would be announced in due course.

Chancellor of the Exchequer George Osborne said in March the government would sharply reduce its stake in Lloyds in the next year to raise at least 9 billion pounds ($14.07 billion). He said Lloyds' return to profit and the resumption of dividend payouts this year means "we can continue our exit from that bailout." Mr. Osborne didn't give details on how the share sale would be carried out.

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