London - Britain's finance ministry will sell at least £2bn worth of shares in Lloyds Banking Group to retail investors in spring 2016 as part of plans to return the bank to full private ownership, it said on Monday.
The sale is set to be the biggest privatisation since the 1980s, when Margaret Thatcher's government sold £3.9bn worth of shares in British Telecom and £5.6bn worth of British Gas shares in an offer which became famous for its "Tell Sid" television advertising campaign.
As well as raising money to pay down Britain's debt, those sales aimed to encourage ordinary Britons to invest in the stock market, an aspiration shared by the current Conservative government, which gathered for its annual party conference in Manchester on Sunday.
The Lloyds shares will be offered to retail investors at a discount of 5% to the market price, with a bonus share for every 10 shares for those who hold their investment for more than a year. The value of the bonus share incentive will be capped at £200 per investor, the Treasury said in a statement.
People applying for investments of less than £1 000 will be prioritised, the finance ministry added.
Lloyds needed to tap £20.5bn from the public purse to avert collapse at the peak of the financial crisis in 2008, which left the government with a 43% stake.
Britain's government has recouped almost three-quarters of the taxpayer cash used in the rescue of the bank through sales of shares to institutional investors since September 2013.
It now owns just under 12% of the lender.
During Britain's national election, Finance Minister George Osborne said he would look to sell part of the government's stake to private investors if the Conservative Party won a majority.
Osborne is pressing ahead with the sale, seen as a symbol of Britain's recovery from the financial crisis, despite mild opposition from some of Lloyds institutional shareholders, who have suggested the government could avoid unnecessary costs to the taxpayer if it continued to sell down its stake on the market.
The government has sold almost 13% of the bank since appointing Morgan Stanley in December to sell the government's shares daily on the stock market.