Lloyds offloads Spanish division
Lloyds Banking Group reduced its exposure to struggling Spain today by agreeing to sell its retail banking operations in the country.
The loss-making portfolio of mortgages and deposits is to be sold to Banco Sabadell in return for a 1.8% stake in the Spanish bank worth £72m (€85m).
Lloyds, which will update investors on current trading tomorrow, will take a loss of around £250m (€296m) on the disposal. Its Spanish corporate banking operations, serving business clients, are not included in the deal.
The group said the sale was in line with plans to rationalise its international presence and ensure the best value for shareholders, including the taxpayer through the Government’s 39% stake.
The business being sold made a loss of £43m (€51m) last year, driven by a further increase in provisions against bad loans. Total assets worth more than £1.5bn (€1.78bn) will transfer in the sale.
Lloyds was dealt a blow last week after the collapse of the planned sale of 632 UK branches to the Co-operative Group. It will now look to offload the TSB-branded estate through a stock market flotation.
Bottom-line pre-tax profits for the first three months of this year are expected to be £1.1bn (€1.3bn), against £288m (€341m) in 2012, thanks to the absence of mammoth charges for mis-selling of payment protection insurance.
