Abbey sells off equity portfolio
British high street bank Abbey today announced it had sold the bulk of its remaining private equity portfolio for an undisclosed sum.
The move is part of the group’s strategy to exit its troubled wholesale banking division, which provides loans to corporate clients, and focus on providing personal banking.
Included in today’s transaction are the group’s interests in 41 private equity funds and direct shareholdings in 16 private European companies.
The sale, to London-based Coller Capital, represents the majority of Abbey’s remaining private equity portfolio.
The group said the price represented a £59m (€85m) discount on the holding value of the funds, which were listed as £500m (€720.9m) on Abbey’s balance sheet at the end of September, although this figure included other private equity interests which have yet to be sold or have been sold separately.
The exact value of the portfolio, for which the group has been looking for a buyer for about a year, will not be revealed until it reports its final results on February 25.
However, a spokesman said that while Abbey would make a loss on the sale, it would be in line with market expectations.
The deal, which is subject to the approval of the general partners of the funds involved, is expected to be completed within the next few months.
Anna Merrick, director of special finance at Abbey, said: “This is a fair deal for Abbey, at a price in line with our expectations, and is another step in disposing of assets that are no longer core to our strategy.”
The group decided to abandon its troubled wholesale division in February last year after its took a £95m (€137m) hit from collapsed US energy firm Enron.
The news came as Abbey reported its first loss since becoming a plc, with pre-tax losses of £984m (€1,419m) for 2002, against profits of £1.47bn (€2.1bn) the previous year,
It said at the time it would take three years to turn the group around.
