The latest disposal of around one per cent of the group represents stock worth in the region of £500m and means the Treasury has now recouped more than half of the £20 billion in bail-out funds committed in 2009.
The Government has reduced its stake by five per cent in the past three months, raising about £2.5 billion as part of a trading plan launched in December.
Chancellor George Osborne wants a further £9 billion of Lloyds shares to be sold over the next 12 months, including about £4 billion through a discounted offer to retail investors.
No shares have been sold below the price the Government paid for them, which was 73.6p. Lloyds closed at just above 86p last night.
A spokesman for Lloyds Banking Group said: “Today’s announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back.
“This reflects the hard work undertaken over the last four years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper.”
The stock market must be notified every time the Government’s shareholding in the bank crosses a one percentage point threshold. The stake is now 19.93%, compared with 40% in 2009.
Mr Osborne said: “These sales have only been made possible by our long-term economic plan, and we are determined to build on this success, and to continue to return Lloyds to the private sector and reduce our national debt.”