October 29, 2015 / 7:21 AM / 3 years ago

Government trims Lloyds stake to single-digits as retail offer looms

A pedestrian passes the head office of the Lloyds Banking Group in central London August 5, 2009. REUTERS/Stefan Wermuth

LONDON (Reuters) - The government has sold off another 1 percent of its stake in Lloyds Banking Group, trimming its total interest to below 10 percent just months before a final sell-off aimed at returning the lender to full private ownership.

UK Financial Investments, which manages the government’s stakes in taxpayer-supported Lloyds and Royal Bank of Scotland, has now recouped around 16 billion pounds of the 20.5 billion pounds of public cash required to rescue Lloyds during Britain’s banking crisis in 2008, the bank said in a statement on Thursday.

The bank reported weaker than expected third-quarter results on Wednesday and also set aside another 500 million pounds to compensate customers mis-sold loan insurance, bringing its total compensation bill to nearly 14 billion pounds, more than double that of any other bank.

Earlier this month, the British finance ministry said it would sell at least 2 billion pounds worth of Lloyds shares to private retail investors in spring 2016.

The sale is set to be the biggest privatisation in Britain since the 1980s.

The finance ministry began selling off its 43 percent stake in September 2013.

UKFI has sold 15 percent of the bank since appointing Morgan Stanley in December to execute a trading plan that seeks to sell the government’s shares daily on the stock market.

Reporting By Sinead Cruise; editing by Simon Jessop

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