UK government cuts Lloyds stake to just under 9%

The UK government has cut its stake in Lloyds Banking Group to just under 9%, or 6.42bn shares from 7.1bn previously.

The government began selling its shares in Lloyds – which was bailed out by taxpayers during the financial crisis – back in 2013.

Earlier this month, UK Financial Investments Limited, which manages the government's stake in the bank, said it would resume selling shares as it looks to return Lloyds to private ownership in the next 12 months.

On Wednesday, Lloyds said it set aside a further provision of £1bn for compensation for mis-selling payment protection insurance in the third quarter, but reaffirmed full-year guidance despite a dip in net income and profits.

Net income of £2.85bn in the three months ended 30 September fell 1% from the same period last year, with underlying profits down 3% to £1.91bn as increased impairments offset lower costs and so fell short of the £2.04bn Bloomberg consensus.

Net interest margin, the measure of how well the bank balances the amount it pays out on savings and makes on loans, fell to 2.72 for the first nine months of the year from the 2.74 at the end of the first half, largely as expected due to the low interest environment.

At 0955 BST, the shares were down 0.1% to 55.85p.