The UK government has sold a further £500m ($778.4m, €692.6m) worth of taxpayer-backed shares in Lloyds Banking Group.

It means that the government now has less than a 20% stake in the bank. The government was forced to absorb a 41% stake in Lloyds, costing £20bn of taxpayers' money, following the 2008 financial crisis.

Since the turn of the year the government has sold £10bn worth of shares in the bank, under the supervision of UK Financial Investments.

The Tories had sought to sell shares to private investors in 2014 but halted the policy when the share price began to decline. Prior to the election, the Conservative party said that it would sell part of its stake to private retail investors at a discount.

Lloyds has bounced back amid the economic recovery, recently announcing its first dividend payout since the financial crisis. It paid out £535m to be split among the bank's three million shareholders, with the largest share of £130m going to the government.

Lloyds' fortunes provide a sharp contrast with RBS, which has not provided an opportunity to recoup any of its bail-out.

Since their election victory, the Tories have admitted that shares in RBS may begin being sold at a loss later this year.