LONDON--The British government on Monday extended a program through which it is selling shares in Lloyds Banking Group PLC and said it would launch a share sale open to retail investors in the next 12 months. The U.K. has been gradually reducing its stake in the lender since December as part of a trading program that was set to end in June. That program, conducted by Morgan Stanley, has now been extended until Dec. 31. As part of its plans to fully return Lloyds to the private sector, the Treasury also said it would launch a separate retail share sale within 12 months, for which details would be set out in due course. News of the extension and retail offer came as the government said it had further reduced its stake in Lloyds by another percentage point to 18.99%, the latest in a series of small sales of shares in the bailed-out bank via the trading program. The government now owns 13.56 billion shares, compared with its previous holding of 14.22 billion shares before the transaction. No price was disclosed for the share sale, which was conducted on Friday. The Treasury said in a statement that the latest sales mean that the government has recovered almost GBP3.5 billion for the taxpayer from the trading plan, bringing the total recovered from Lloyds to over GBP10.5 billion. Lloyds was bailed out by U.K. taxpayers during the financial crisis, with the government taking a 39% stake in the U.K.'s biggest retail bank. The government started selling its shares in Lloyds in late 2013. After initially selling portions of Lloyds directly to investors through accelerated placements, the government in December mandated Morgan Stanley to gradually sell stock. Chancellor of the Exchequer George Osborne said in March that the government would sharply reduce its stake in Lloyds in the next year to raise at least GBP9 billion. He said the bank's return to profit and the resumption of dividend payouts this year means "we can continue our exit from that bailout."

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