Lloyds Banking Group (LYG) shares rose Tuesday after the U.K. government cut a further portion of its stake in the rescued lender ahead of its key autumn budget statement.
The sale, which takes the government's stake below the 8% threshold as part of a trading plan that is being managed by Morgan Stanley (MS) , places the government on track to achieve a full exit from the bank by October 2017, although it remains to be seen whether it will recoup all of the taxpayer's investment.
"Selling our shares in Lloyds Banking Group and making sure that we get back all the cash taxpayers injected into it during the financial crisis is one of my top priorities," Chancellor Philip Hammond said in a statement. "So I am pleased that we have continued to reduce our stake in Lloyds, and have now recovered over £17 billion for the taxpayer."
Lloyds stock rose 1.5% by 09:30 GMT to change hands at 60 pence each in London trading, extending a post-U.S. election gain to just under 7%.
The U.K. government has invested a total of £20.3 billion ($25 billion) in the bank, with the total amount split between a direct bail out, a rights issue and debt forgiveness. It said in October that it would give Morgan Stanley bankers full discretion over how and when to manage the exit from the bailed-out lender.
U.K. Financial Investments, which oversees the government shareholding, reported in its latest set of accounts that the government has raised more than £16 billion from Lloyds share sales during recent years.