Britain has cut its stake in Lloyds Banking Group to just below 8 per cent in a renewed attempt to return the lender to full private ownership over the next year.

Lloyds said in a statement on Tuesday the government had reduced its stake in the bank by about 1 percentage point to 7.99 per cent.

UK Financial Investments Limited, which manages the government’s stake in the bailed-out bank, last month resumed share sales that were shelved almost a year ago because of market turbulence.

“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,” the bank said in a statement.

Taxpayer-funded bailout

Lloyds was rescued with a £20.5 billion taxpayer-funded bailout during the 2007-09 financial crisis, leaving the state holding 43 per cent.

British finance minister Philip Hammond is under pressure to recoup cash from the government's stake in Lloyds and fellow bailed-out bank Royal Bank of Scotland to relieve a likely shortfall in the nation's finances.

The UK has recouped over £17 billion of taxpayer cash after it began selling off its stake in 2013.

– (Reuters)