All of the £20.3bn used to bail out Lloyds Banking Group has now been recouped
The Government has recouped the £20.3 billion used to bail out Lloyds Banking Group during the financial crisis, leaving the lender on the brink of privatisation.
Chancellor Philip Hammond said the Government has now recovered £20.4 billion since it began selling off its stake in the high street bank four years ago.
The taxpayer's final stake in Lloyds - now less than 2% - is expected to be sold off in the coming months, with any profits being used to pay down the deficit.
The announcement comes just days after the Chancellor admitted that the Government is prepared to sell its 72% stake in Royal Bank of Scotland (RBS) at a loss to the public purse.
Speaking in Washington, 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."
The Government had mulled plans to shed its remaining stake in Lloyds through a retail sale, but former chancellor George Osborne halted the attempt in January 2016, blaming market turbulence.
The idea was eventually ditched altogether by Mr Hammond in favour of a drip-feed sale to institutional investors through a trading plan.
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."
Lloyds emerged as a key player in the Government's handling of the credit crunch despite being a domestically focused bank with only a small exposure to the collapse of the sub-prime mortgage market that battered funds on either side of the Atlantic.
Problems emerged for the lender after former prime minister Gordon Brown cleared the way in 2008 for it to make a £12 billion takeover tilt for HBOS to help shore up the sickly firm's balance sheet and prevent a full nationalisation.
The Black Horse was attracted by the prospect of creating a UK superbank, while HBOS - Britain's biggest mortgage lender - needed financial support after seeing its shares tank when US lender Lehman Brothers was bankrupted by sub-prime mortgage losses.
However, these best laid plans came unstuck when it became clear that HBOS had saddled Lloyds with heaps of toxic assets stemming from risky bets made by HBOS on commercial property during the boom years.
To ensure its future, the Government upped the bailout funds pumped into Lloyds to £20.3 billion, lifting its stake to 43%.
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.
"For the Treasury, the elephant in the room is of course RBS, which required twice as much financial support from the taxpayer as Lloyds.
"The RBS share price needs to double from its current level before the taxpayer breaks even on the bailout, and that isn't happening any time soon."
Lloyds announced earlier this year that it had recorded its highest annual profits for a decade at £4.24 billion for 2016.