The Government owned a 43% stake in Lloyds following the bailout during the financial crisis PA

The British Government is making "real progress" in its bid to return Lloyds Banking Group to public ownership, after cutting its stake in the lender to below 5% on Monday (30 January).

UK Financial Investments Limited (UKFI), which manages the government's stake in the bailed-out lender, cuts its stake from 5.95% to 4.99%, meaning the Treasury has now recouped £18.5bn ($23.2bn) of its £20.3bn bailout.

"Since our decision to sell the Government's stake in Lloyds we have recovered over 90% of the money taxpayers injected into the bank during the financial crisis," said Simon Kirby, the Economic Secretary to the Treasury.

"This represents real progress and I am delighted that we are on track to return Lloyds to private ownership."

The bailout left the Government in control of a 43% stake in the British lender, which has then been progressively sold. Earlier this month, the Government cut its share by 1% which, according to data compiled by Bloomberg, left US investment firm BlackRock as the biggest shareholder in the lender.

UKFI resumed the shares sale in October last year, after halting them for almost 12 months in the wake of market volatility.

Upon resuming the sale, Chancellor Philip Hammond said the Government aimed to return the bank to private ownership by the end of this year.

"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," he said.

Lloyds' progress is in stark contrast with Royal Bank of Scotland's ongoing struggle. Last month, RBS, which is still 73%-owned by the taxpayers following its £45bn bailout in 2008, set aside £800m after reaching an agreement to settle claims from shareholders who claimed the bank misled them during its £12bn fundraising in 2008.