A branch of Lloyds Bank in the City of London. Photo: Toby Melville/Reuters

Lloyds Banking Group said it would support plans by Britain’s Conservative Party to sell some of the government’s remaining 22 per cent stake in the bank to retail investors.

Finance Minister George Osborne said on Sunday he intended to sell billions of pounds of government-owned shares in Lloyds to small investors if the Conservatives win Britain’s national election next month.

“The sale of the stake is clearly a matter for the government. We will support the government in whatever way is required in due course,” a Lloyds spokesman said.

The Conservative Party said investors would be able to buy between £250 and £10,000 of Lloyds shares, with priority going to orders of up to £1,000.

The shares would be sold at a 5.0 per cent discount to market value and investors who hold their shares for a year would receive an extra 10 per cent, up to a value of £200.

Lloyds would need to prepare a prospectus to help to market any sale of shares to retail investors. The bank made preparations for such a sale last year before the government shelved the plans because of a decline in the bank’s share price.

Since then, Lloyds has announced its first dividend since a £20 billion government rescue during the financial crisis, making the stock easier to market to retail investors.

“There are now more options to sell the shares in different ways,” James Leigh-Pemberton, chairman of UK Financial Investments, the body that manages the government’s stake, said in a letter to Osborne in March this year.

The government has so far sold almost half of the 43 per cent stake it was left with following the bailout. To date, the shares have been sold to financial institutions such as pension funds and insurers.

Osborne said in March that Britain would raise at least £9 billion from selling shares in Lloyds over the next year but did not specify what type of investor the shares would be sold to.

Before the financial crisis, Lloyds had a record of being one of the highest dividend paying stocks in Britain, handing over half its profit to shareholders in 2005 and 2006 and analysts say it could eventually pay out that much again.