Lloyds Banking Group has confirmed that preparation has begun for a second sale of government owned shares in the bank.
Reporting on its progress ahead of its full results announcement, scheduled for 13 February, the group also said it expects to apply to the Prudential Regulatory Authority in the second half of 2014 to restart dividend payments to shareholders.
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The group said: "The Board expects that it will apply to the PRA in the second half of 2014 to restart dividend payments, commencing at a modest level.
"The Group can also confirm that, following the statements made by the Chancellor in his Mansion House speech and in the Autumn Statement, preparatory work including the preparation of certain documents required for a possible future sale of shares in Lloyds Banking Group to the public, has commenced."
Lloyds Banking Group also announced that, during the fourth quarter of 2013, it had put aside another £1.8bn ($2.9bn) for PPI compensation, bringing the total cost of PPI to the bank to nearly £10bn.
Despite this rise in PPI compensation payments, group CEO António Horta-Osório said the bank had made "significant progress".
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By GlobalDataHe said: "Over the last three years we have reshaped, simplified and strengthened the business to create a low-risk efficient retail and commercial bank that is focused on our customers and on helping Britain prosper.
"Our significant progress in delivering sustainable improvements in our capital position and our profitability, despite legacy issues, is testament to the strength of our business model and the commitment of our people, and has enabled the UK government to start to return the bank to full private ownership.
"We expect to apply in the second half of 2014 to restart dividend payments and to deliver progressive and sustainable payments to shareholders thereafter. This will be another important step in our journey to rebuild trust and confidence in our Group."
The total cost to UK banks of paying out compensation for miss-sold PPI products is estimated to be nearly £20bn, while costs to Lloyds are understood to total £9.8bn after the most recent announcement.
Business editor for the BBC Robert Peston has said that PPI has actually played a positive role in the UK’s economic recovery.
Speaking on BBC Radio 4’s Today programme he said: "These PPI payments have played a very big role in encouraging economic recovery."
Expanding on these comments on the BBC website, he said: "It represents an economic boost equivalent to circa 1% of GDP – which is big.
"It is a bigger direct fiscal stimulus than anything either government has attempted since the crisis of 2008, involving more money for example than the temporary VAT cut of 2009.
"It is difficult to judge whether PPI compensation has been more effective in encouraging the recovery than quantitative easing, or Funding for Lending or the two phases of Help to Buy.
"But those initiatives are qualitatively very different from the PPI stimulus – they all in effect pump mind-boggling quantities of cheap loans into the economy, or money that eventually has to be paid back, whereas PPI compensation is a handout of free, no-strings cash."
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