Partially state owned Lloyds Banking Group has reported a pretax profit for the first time in three years, and said it is ready to return to private ownership.

Profit last year was 415 million pounds (505 million euros) compared to a 606 million pound loss in 2012

A third of the bank is owned by the British government after it had to be bailed out with taxpayer money during the financial crisis,

Lloyds shares have more than doubled in price over the past two years and the government is likely to sell its stake before the 2015 general election.

Banking and political sources expect a sale of shares to institutions such as pension funds and insurers in March or April followed by a larger offer including retail investors later in the year.

Lloyds’ Chief Executive Antonio Horta-Osorio, who has turned around its fortunes since taking the helm in March 2011, said the bank was now ready to return to full private ownership whenever Britain’s finance
ministry and UK Financial Investments decide it is right to do so.

“We absolutely consider ourselves back to normal. Its absolutely up to UKFI (which manages the government’s shares) and the Treasury to decide how and when to dispose of those shares,” he said.

Horta-Osorio slimming down Lloyds to focus on lending to UK households and businesses and meet tougher regulatory requirements on the amount of capital it must hold.

There is the risk of a political backlash as the annual report revealed the bank paid out 395 million pounds (481 million euros) in bonuses last year.

That was up eight percent on the previous year, including a 1.7 million pound (2.07 million euros) award to Horta-Osorio.

His bonus will be paid in shares and is deferred for five years.