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Osborne: Lloyds Bank to return to private hands

19 June 2013 Last updated at 22:49 BST

The Chancellor, George Osborne, has used his annual Mansion House speech to the City to announce the government is preparing to sell its stake in Lloyds Bank back to private investors.

Mr Osborne said Lloyds - 39%-owned by the government - was in a good position and investor interest was growing.

On RBS, in which taxpayers have an 81% stake, he said he would look at whether to split the good bits from the bad.

His speech comes on the same day as a major report into the banking sector.

Robert Peston reports.