Sunday 17 July 2016 4:36 pm

Chancellor Philip Hammond is reportedly considering an early sale of the government's remaining Lloyds Bank shares

Chancellor Philip Hammond may be weighing a rapid sale of government holdings in Lloyds, despite the fact that shares in the bank remain almost 25 per cent below a previously estimated break-even price.

Hammond, who was Prime Minister Theresa May's first appointment last week, is reportedly considering early sales for the bank shares.

Lloyds shares closed at 55.99p on Friday. All sales of the bank's shares have happened at above 73.6p, previously considered the point at which the government can make money from the rescue of the bank.

However because the government has been able to make a profit on previous Lloyds sales, the price at which it can sell and still break-even has dropped, and according to the Sunday Telegraph, Hammond may seize the chance to sell the remaining nine per cent stake in the bank more quickly to raise cash.

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The government has raised £16bn from sales of shares acquired after the £20bn bailout, as well as a further £500m from dividends and fees.

As a result, if Hammond were to sell at Friday's closing price, the government would still break-even on its investment in Lloyds, while sacrificing a greater potential profit.

City A.M. understands that limited conversations have already taken place between UKFI, the body responsibly for the sale of the shares, and HM Treasury.

A source close to the matter said that an early sell-off could be “quite logical” but said the new Chancellor is still considering his views on the government holdings.

A Treasury spokeswoman said: "The timing and method of future sales are dependent on market conditions.

“The government remains committed to fully returning its stake in Lloyds Banking Group to the private sector.”

Lloyds Bank and UKFI declined to comment.