THE Government has recouped the £20.3 billion used to bail out the Lloyds Banking Group during the financial crash, leaving the Bank of Scotland owner on the brink of privatisation.

Nine years after the Government bought 43 per cent of Lloyds, the taxpayer has now got slightly more – £20.4bn – back.

It comes a matter of days after the Chancellor Philip Hammond suggested the taxpayer’s 72 per cent stake in the Royal Bank of Scotland may be sold at a multi-billion-pound loss.

The public’s final stake in Lloyds is now less than two per cent.

It is expected to be sold off in the coming weeks, with any profits being used to pay down any shortfall.

Mr Hammond said: “Recovering all of the money taxpayers injected into Lloyds marks a significant milestone in our plan to build an economy that works for everyone.

“While it was right to step in with support during the financial crisis, the Government should not be in the business of owning banks in the long term.

“The right place for them is in the private sector and I’m pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds Bank.”

Most of the money returned to taxpayers has come from selling tranches of Lloyds shares, which began in September 2013 with the offloading of a £3.2bn stake.

But the government has also received £400m in share dividends from Lloyds as the group returned to health.

In February, Lloyds posted its highest annual profit in a decade, assisted by a reduction in payment protection insurance provisions.

Lloyds Group Chief executive Antonio Horta-Osorio said: “As the Government announces it has now received all of the £20.3 billion that was originally put into the group, it is a moment of huge pride for all of us at Lloyds.

“Colleagues have worked incredibly hard over the last six years to play their part in this journey. As we look to the future, we remain absolutely focused on our commitment to help Britain prosper.”

Laith Khalaf, senior analyst at Hargreaves Lansdown, said it had taken the Government longer than expected to recover the bailout money.

He said: “The remaining stake can now be sold off as pure profit for the Government, and when Lloyds finally returns in its entirety to private hands, it will become a normal bank once again.”

The development comes less than three weeks after Lloyds faced fresh anger over the closure of a further 100 branches, resulting in more than 200 job losses.

Unite said the announcement was to affect 54 Lloyds branches, 22 Halifax branches and 24 Bank of Scotland branches between July and October.