British government no longer top Lloyds shareholder

(Adds shareholder details, share price)

LONDON, Jan 9 (Reuters) - The British government is no longer top shareholder in Lloyds Banking Group after reducing its stake to below 6 percent as it aims to return the lender to full private ownership this year.

UK Financial Investments Limited (UKFI), which manages the government's stake, resumed share sales in October, having halted them for almost a year due to market turbulence.

The government has reduced its stake by a further one percentage point to 5.95 percent, Lloyds said in a statement on Monday.

That leaves BlackRock (Sao Paolo: BLAK34.SA - news) , the world's largest asset manager, as Lloyds top shareholder.

The government was left with a 43 percent stake in Lloyds after a 20.5 billion pound ($25 billion) taxpayer-funded bailout during the 2007-09 financial crisis.

Britain's finance ministry has recovered more than 18 billion pounds, Lloyds said.

"Today's announcement that the UK Government is no longer our largest shareholder is a key milestone in the journey of Lloyds Banking Group back to full private ownership, returning taxpayers' money at a profit," said Antonio Horta-Osorio, chief executive of Lloyds.

Finance Minister Philip Hammond is under pressure to recoup cash from its stake in Lloyds and Royal Bank of Scotland (LSE: RBS.L - news) , which was also bailed out.

"Returning Lloyds to the private sector and recovering all of the cash the taxpayer injected into the bank during the financial crisis is a priority for the government," Hammond said.

Lloyds shares were up 0.2 percent at 66 pence at 0810 GMT. ($1 = 0.8205 pounds) (Reporting by Anjuli Davies; editing by Rachel Armstrong and Jasan Neely)