Lloyds sell £1bn of assets

Taxpayer-backed Lloyds Banking Group has sold more than £1bn (€1.27bn) of investments it inherited from its disastrous takeover of HBoS as part of its drive to return its balance sheet to health.

Taxpayer-backed Lloyds Banking Group has sold more than £1bn (€1.27bn) of investments it inherited from its disastrous takeover of HBoS as part of its drive to return its balance sheet to health.

It has agreed to sell a portfolio of 71 private equity related assets to a fund overseen by Coller Capital, an investor that specialises in such deals.

The disposal is part of Lloyds chief executive Antonio Horta-Osorio’s plan to restore the bank to health following its £20bn (€25.4bn) rescue by the government in 2008.

Lloyds has already sold some £23bn (€29.2bn) of non-core assets so far this year on top of £53bn (€67.3bn) last year, meaning it is getting rid of about £1bn (€1.27bn) of assets a week, as it looks to focus on its core banking operations.

Banks are also being required to hold more capital as regulations are tightened in the wake of the financial crisis.

Lloyds, which is 40% owned by the taxpayer, has targeted at least another £47bn (€59.7bn) of such sales by the end of 2014.

Lloyds was left needing a bail-out following the acquisition of HBoS in 2008 at the height of the financial crisis.

A recent damning report by the FSA found that corporate lending at Bank of Scotland, which was part of HBoS, was aggressive and focused on high risk, sub-investment grade lending, which left it “highly vulnerable”.

In the three years from the start of 2006, its transactions increased in size and complexity and left it with concentrated exposures to property and significant large borrowers.

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