Lloyds share price: Lender sells loss-making Irish home loans for £257mn

Written by: Siana Mishkova
October 21, 2019

iNVEZZ.com, Friday, December 6: Lloyds Banking Group (LON:LLOY) said today it has agreed to sell a portfolio of non-performing Irish retail mortgages to Tanager Limited, an entity affiliated with Apollo Global Management (NYSE:APO), for a cash consideration of £257 million, less than half their nominal value. The gross assets included in the deal total £610 million and generated a loss of £33 million last year, Lloyds said in a statement. The bank plans to use the proceeds from the sale, which is expected to be completed in the first half of next year, for general corporate purposes. It advised that the transaction will likely have no material impact on earnings, due to existing provisions taken against these assets.

**Asset disposals**
“The transaction is part of the Group’s continued non-core asset reduction programme,” Lloyds said. The lender, which is 33 percent owned by the British government following a £20 billion bailout in 2008, has been shoring up its capital position by divesting non-core assets in order to comply with regulatory demands. The bank needs to plug an £8.6 billion hole, identified by Britain’s financial regulator in June, to help convince the watchdog to allow the restart of dividend payments next year.

Last week, Lloyds agreed to sell a distressed portfolio of European corporate real estate loans, worth £1.09 billion, to Cerberus Institutional Partners for £860m. The portfolio, which generated losses of £7.0
million last year, was sold at a 21 percent discount to its nominal value.
Earlier in November, Lloyds agreed to sell its asset management business, Scottish Widows Investment Partnership (SWIP), to Aberdeen Asset Management (LON:ADN) in a deal worth up to £660 million (Bank sells SWIP to Aberdeen Asset Management in £660 million deal), and disclosed plans to float its TSB business next year (TSB IPO planned for next year).

In addition, some analysts expect the bank to sell at least 12 percent of its 22 percent stake in London-based wealth manager St. James’s Place (LON:STJ) by mid-December (Bank tipped to sell at least 12% of St. James’s Place by mid-December – https://invezz.com/news/equities/7143-lloyds-share-price-bank-tipped-to-sell-at-least-12-percent-of-st-jamess-place-by-mid-december).

**Retail investors to take part in state stake sale**

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Yesterday, the UK government said that retail investors will be given the chance to participate in future sales of Lloyds’ shares along with institutional investors. “While the first sale was aimed at institutional investors, the government would like to give the British public the opportunity to participate directly in future sales when the time is right,” the government said in its Autumn Statement. UK Financial Investments (UKFI), which manages taxpayers’ stakes in bailed out banks, has been mandated to assess potential demand and develop the best mechanism for retail investors to participate. It is widely expected that the government will reduce further its stake in Lloyds next year after selling a six percent stake for £3.2 billion in September. Lord Blackwell, who was appointed as Lloyds’ next chairman on Monday, is expected to launch a review of the bank’s operations aimed at ensuring a swift exit for the government.
Lloyds share price rose 0.9 percent to 77.86p by 10:43 UTC today.
**As of 10:30 UTC buy Lloyds shares at 77.92p.**
**As of 10:30 UTC sell Lloyds shares at 77.89p.**

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