By Margot Patrick

LONDON--The U.K. government is no longer the largest shareholder in Lloyds Banking Group PLC (LLOY.LN) after cutting its stake below 6% Friday.

The Treasury, which gave Lloyds GBP20 billion in emergency capital in 2008 and 2009 said on Monday it has gotten GBP18 billion back so far through share sales in the bank and should recover the total. Blackrock Inc. is Lloyds Banking Group's biggest shareholder now, with around 6.3% according to filings.

At the height of its bailout, Lloyds--Britain's biggest retail lender by assets--was 43% government owned. The part ownership came with political strings attached. Lloyds abandoned its global ambitions and recast itself as a safe domestic bank for households and business.

Putting it back into private hands has ended up taking years longer than initially expected, as legal and regulatory penalties stacked up at the bank and weighed on profits. The government started selling its shares in the bank in late 2013.

All money raised from the sales are used to reduce the national debt. The government still owns 73% of Royal Bank of Scotland Group PLC, with the shares currently worth less than half of the price paid.

Write to Margot Patrick at margot.patrick@wsj.com

(END) Dow Jones Newswires

January 09, 2017 05:16 ET (10:16 GMT)

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