Lloyds to Sell Assets Worth GBP500 Million

By Peter Evans

LONDON--Lloyds Banking Group PLC (LYG) Wednesday said it agreed to sell more than 500 million pounds ($861 million) of assets in two separate deals, part of the 39%-government-owned bank's strategy of selling off non-core assets to strengthen its capital base.

The U.K. lender agreed to sell a portfolio of leveraged loans to ELQ Investors II Ltd., a unit of Goldman Sachs Group Inc. (GS), for GBP254 million.

Lloyds will also sell its German life insurance business Heidelberger Lebensversicherung AG to a joint venture company owned by Cinven Partners LLP and Hannover Rück SE for GBP250 million.

The transaction is expected to lead to a loss of around GBP330 million in the group's accounts, but is also expected to result in a benefit to the bank's common equity tier 1 capital of GBP0.4 billion upon completion.

Lloyds is seeking to sell non-core assets as it attempts to fill some of its multi billion pound capital deficit ahead of an anticipated sale of its government-owned stake.

The lender is also looking to sell $8.7 billion of U.S. mortgage securities and asset-management unit Scottish Widows Investment Partnership.

Write to Peter Evans at [e-mail]