In a statement to the stock exchange this morning, Lloyds said HM Treasury now owns 10.97 per cent of the group, having sold more than 724.6 million shares worth about £552.8 million to institutional investors.
The UK government announced on Monday that the sale of Lloyds Banking Group shares to the public will kick off in the spring, with retail investors being offered “at least” a £2 billion stake in the lender.
Members of the public will be offered a discount of 5 per cent of the market price, with a bonus share for every ten shares for those who hold their investment for more than a year.
The value of the bonus share incentive will be capped at £200 per investor, and people applying for investments of less than £1,000 will be given priority in the share sale.
Chancellor George Osborne said the government has now recouped £15.5bn of the £20.5bn state lifeline Lloyds received after it took over rival HBOS in the worst days of the financial crisis in 2008.
The Treasury has reduced its stake from 24.9 per cent when it announced a trading plan in December to sell shares gradually into the market.
Osborne said: “I am determined to build on this success by making Lloyds shares available to the public next spring, so that we can build a share-owning democracy and continue to reduce our national debt.”