The Treasury is no longer the biggest shareholder in Lloyds Banking Group, which owns Bank of Scotland and Halifax.

It has sold 4.24 million shares, reducing its holding to 5.95% and has so far recovered £18 billion of the £20.3bn that was pumped into the bank during the 2008-09 financial crisis.

Chancellor Philip Hammond said: “Returning Lloyds to the private sector and recovering all of the cash the taxpayer injected into the bank during the financial crisis is a priority for the government.”

The government under Prime Minister Theresa May decided against a public issue of shares in Lloyds Banking Group which had been planned by former Chancellor George Osborne.

UK Financial Investments has held shares in the bailed out banks on behalf of the taxpayer.

Lloyds is now on course to be fully back in private hands by the end of the year.