The Government is looking to reduce the overall size of the taxpayer stake in Lloyds and simultaneously shift more than five billion shares.
Chancellor tells ITV News the sale of £3.21bn worth of Lloyds shares will not necessarily trickle down to struggling households.
The Treasury has started the process of one of the most anticipated business deals in years, but will the taxpayer get their money back?
Lloyds Bank is to axe 645 jobs and close a telephone banking centre in Warrington, the Unite union has said.
As the government confirmed it has sold more of its stake in Lloyds Bank, ITV News Business Editor Joel Hills looks at what that means for the tax payer and the company:
UKFI says overnight it raised £4.2 billion by selling more of the taxpayer's stake in Lloyds. Got 75.5p/share, market close yesterday 79p.
Our stake in Lloyds has fallen to 24.9% - in the City when a company owns 25% of another company it is deemed a controlling shareholder.
UKFI is a company with HM Treasury as its sole shareholder which is mandated to manage the Treasury's shareholdings.
Government has sold 7.8% of shares in Lloyds Banking Group, at 75.5p per share.
Govt stake in Lloyds now less than 25%. Part of our long term economic plan to deliver economic security
The government is planning to sell more of its stake in Lloyds Bank, ITV News Business Editor Joel Hills reports.
Another slice of our stake in Lloyds to be sold overnight. UKFI hopes to raise £4.2 billion + reduce taxpayer holding from 32.7% to 25%
There's a picture emerging of a nervousness across the finance sector north of the border, after Lloyds and Barclays warned that a vote for Scottish independence may carry risks and costs for them.
There was even talk emerging today of Lloyds and RBS having to move their headquarters south in the event of independence.
That's because it seems there is an old European diktat that says a finance house must be headquartered where most of its customers live - in both those cases, that would be in England.
So that would be bad news potentially for jobs in Scotland, and bad news certainly for the prestige of Edinburgh as a major finance hub.
However, George Osborne has warned in the past of a bloated finance sector that Scotland couldn't support in the event of a financial crisis.
But if their headquarters weren't in Scotland, it wouldn't be their problem - it would be England's.
So as ever on this topic, there's more than one way to look at any of the issues that emerge.
Barclays bank has warned that the upcoming vote on Scottish independence could "affect the group's risk profile" by potentially destabilising financial markets.
Barclays' warning follows concerns expressed by several other financial institutions about the effect of the independence vote, including Lloyds Banking Group, RBS and Standard Life.
Barclays said: "The referenda on Scottish independence in September 2014 and on UK membership of the European Union (expected before 2017) may affect the Group’s risk profile through introducing potentially significant new uncertainties and instability in financial markets."
Barclays said the vote could bring uncertainty "both ahead of the respective dates for these referenda and, depending on the outcomes, after the event".
Scotland's Finance Secretary John Swinney has said the warning by Lloyds Banking Group about the possible "risk" from independence backs up the case for a "formal currency area".
Swinney said: "Scotland has a strong and diverse economy and the point of independence is to win the powers we need to build on those strengths and create a more prosperous and secure economy - which is good for the financial sector and everyone else.
"Lloyd's Banking Group's comments show exactly why our proposals for a formal currency area are the right proposals, why they are in the best interests of business on both sides of the border and why that is what will be implemented by both governments."
Lloyds Banking Group has said that Scottish independence poses "no immediate issues" to its business, after warning that separation could present a "risk" to its operations.
A spokesman for the group said: "Lloyds Banking Group believes that questions about Scotland’s future constitutional position are a matter for the people of Scotland and the UK and Scottish Parliaments.
"There are no immediate issues that will affect Lloyds Banking Group customers either in Scotland or the rest of the UK, particularly as any change in constitutional arrangements are unlikely to come into effect until 2016."
Lloyds Banking Group has warned that Scottish independence poses a potential "risk" to its business.
It listed separation in its annual report as one of the seven key risks in the months ahead.
Pensions and savings firm Standard Life has already issued its own warning about independence, saying it plans to leave Scotland if Scots vote for separation, and "if anything were to threaten" its business.
Lloyds' warning follows similar concerns expressed by RBS that independence poses unknown risks to its business.