LONDON (Reuters) - Britain has cut its stake in Lloyds Banking Group (LLOY.L) to just below 9 percent in a renewed attempt to return the lender to full private ownership over the next year. A woman uses a cash machine at a Lloyds Bank branch in central London, Britain February 25, 2016. REUTERS/Paul Hackett UK Financial Investments Limited (UKFI), which manages the government’s stake in the bailed-out bank, said earlier this month it would resume share sales that were shelved almost a year ago because of market turbulence. Thursday’s announcement of the sale of about 1 percent of Lloyds’ shares came a day after the bank defied expectations of a post-Brexit earnings squeeze by reporting third-quarter profits largely unchanged from a year earlier.Based on the average closing price of 53.93 pence since the trading plan was relaunched the latest sale should have raised about 342 million pounds for the government, according to Reuters’ calculation. If UKFI had sold at the government’s average buy-in price of 73.6 pence it would have raised 467 million pounds, the calculations show. “Selling our shares in Lloyds and making sure that we get back all the cash taxpayers injected into it during the financial crisis is one of my top priorities as Chancellor,” Finance Minister Philip Hammond said in a statement. Lloyds was rescued with a 20.5 billion pound ($25.05 billion) taxpayer-funded bailout during the 2007-09 financial crisis, leaving the state holding 43 percent. Hammond is under pressure to recoup cash from its stake in Lloyds and fellow bailed-out bank Royal Bank of Scotland (RBS.L) to relieve a likely shortfall in the nation’s finances. The UK has recouped about 17 billion pounds of taxpayer cash after it began selling off its stake in 2013. Some politicians and banking analysts have questioned whether restarting sales of the government’s residual 3.6 billion pound stake in the middle of a slump in bank shares represented the best value for taxpayers. “Most people will be thinking now is the time to sit tight and shut up shop but unlike normal investors, the chancellor has an eye on government debt levels and the upcoming autumn statement,” Laith Khalaf, senior analyst at Hargreaves Lansdown, said. The investment manager is petitioning the government to reconsider selling some of its stake to the general public after UKFI recommended scrapping a discounted retail offer. The sale of Lloyds shares on Wednesday were about a third lower than the 81.4 pence average price government shares were sold at in the earlier phase of the trading plan. The government is under pressure to hit a 9 billion pound target for selling state-owned bank shares this year. The bank’s shares were trading 0.2 percent up at 56 pence at 0826 GMT, but have fallen by around a quarter since June’s referendum vote to leave the European Union. Editing by Sinead Cruise and Alexander Smith
The UK government has reduced its stake in Lloyds Banking to just below 9% prior to selling all its stake next year. The government delayed the sale last year because of market turbulence. Finance Minister Phillip Hammond said the sale and recouping taxpayers' investment was one of his "top priorities". However, some politicians and banking analysts are questioning the timing of his decision considering bank shares are in a slump.