Lloyds Bank share sale raises another £500m for UK Treasury

UK Financial Investments, which oversees the government's stakes in bailed out UK banks, has raised £500m (€679m, $768m) from the sale of a further 1% in Lloyds Banking Group.

The sale, which was handled for UKFI by Morgan Stanley, takes the government's holding in Lloyds to 23.9%.

Chancellor George Osborne was ebullient about the latest sale, which adds to previous tranches offloaded above the 73.6p average price that the government paid.

Osborne said: "I am delighted to announce today that the trading plan I launched in December has raised a further £500m for the taxpayer so far. This is further progress in returning Lloyds Banking Group to private ownership, reducing our national debt and getting taxpayers' money back."

Morgan Stanley's drip feed of shares on to the open market has helped reduce the Treasury's holding, which is down from 38.9% 18 months ago.

UKFI had previously raised £7.4bn through two separate sales to financial institutions. These cagey affairs used an accelerated bookbuild - the shares were sold overnight while the stock market was closed.

Some £20bn of UK tax payers' cash was used to prop up Lloyds following the financial crisis of 2007 to 2009 - a 41% shareholding.

Lloyds will report on Friday (27 February) whether it will be given permission from the Bank of England to pay its first dividend since the bailout.

Unfortunately things don't look so rosy at the other government bailed bank, Royal Bank of Scotland.

Its shares are still trading well below the price tax payers stumped up for them, leaving a gap of some £10bn and any such share sale a distant future prospect.