This means more than £20bn has now been recovered since the bailout.

Graham Spooner (pictured), investment research analyst at The Share Centre, said: “We are nearing the end game of government involvement with Lloyds Banking Group as it was announced this morning that another chunk of the taxpayer’s stake has been sold, meaning the holding is now down below 2%. UK Financial Investments indeed cut its holding by around 1% to 1.97%, which means, as it stands, more than £20bn has now been recovered since the bailout in 2008.

“The stake has been perceived as acting as a drag on the share price in a sector that is already under pressure. Investors may want to note that it is expected that the remainder of the stake could be sold before the summer months arrive.

“Like most other banks the group has been cutting jobs and branches in order to target £1.4bn of savings, invest in digital services and products and target a 13.5-15% return on equity. They are now close to finishing the main restructuring, although there will be further branch closures.

“In recent updates analysts were able to spot some areas of improvement with good progress being made regarding strategic priorities, and profits coming in at the highest level in 10 years.  Moreover, the dividend for the year was raised by 13% and there was a special dividend in addition.

“The Brexit result again bought a focussed attention on the sector. This led to a raft of analyst downgrades amid concerns that the tentative steps to recovery have received a significant setback. Where this all puts Lloyds is difficult to access, although the share price has recovered the majority of its post Brexit loss. We continue to recommend Lloyds as a ‘hold’ for medium risk investors seeking growth.”