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Lloyds may net £400m in St James’s stake sale

March 11, 2013  |   Uncategorized   |     |   0 Comment

The sale will bolster Lloyds’ capital levels just weeks before regulators are due to publish a report on the health of Britain’s largest banks, which is expected to show capital shortfalls on the balance sheets of some lenders.

Lloyds said it would retain a 37% holding in St James’s Place, but that following the sale it would no longer consolidate the business’s financial results into its own accounts.

Selling the 102m shares is expected to bring in about £350m to £400m for Lloyds depending on the eventual sale price. Based on these proceeds and the change in accounting for the remaining stake, the bank is expected to recognise a gain of about £600m, increasing its core capital by 0.2pc, taking its core Tier 1 ratio to 12.2pc.

In a statement to the market, Lloyds said the sale was part of its strategy to “simplify” its business, adding that the proceeds of the deal would be used for “general corporate purposes”.

Lloyds gained its stake in St James’s Place following its takeover of HBOS and the future of the holding has frequently been raised as an issue by analysts and investors.

Harry Wilson









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