UK Financial Investments (UKFI), a part of the UK Treasury that owns Lloyds Banking Group, has completed the disposal of 7.8% stake or 5.6 billion shares in the bank for approximately £4.2bn.

With the completion of the shares sale, the UK Government’s stake in the bank is now 23.8%.

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UK Finance Minster George Osborne was quoted by Reuters as saying that the sale represents good value for the taxpayer and the proceeds would be used to reduce the national debt.

"It is another step in repairing the banks, in reducing our national debt and in getting the taxpayers’ money back," Osborne added.

According to banking sources, another sizeable sale is expected in summer or autumn and a full exit from the bank before the general election in May 2015.

The previous sale was carried out in September 2013, when the government sold 6% stake in the bank for £3.21bn, reducing its stake then from 39% to 32.7%.

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UKFI said it will not sell any more shares before 23 June 2014.