Lloyds share price rises on £680m St. James’s Place stake sale
iNVEZZ.com, Tuesday, December 10: Shares in Lloyds Banking Group (LON:LLOY) rose one percent this morning after the bank said it has sold its remaining 21 percent stake in London-based wealth manager St. James’s Place (LON:STJ) for £680 million.
The taxpayer-backed bank, which has been aggressively offloading non-core assets to shore up capital, said it had placed 109 million St. James’s Place shares at 630p. The lender, which needs to plug an £8.6 billion hole identified by Britain’s financial regulator in June, and convince the watchdog to allow it to restart dividend payments next year, said the sale will increase its common equity tier 1 capital by £685 million, equivalent to a 24 basis points benefit. The gain on the sale is calculated at £105 million.
Lloyds CEO Antonio Horta-Osorio noted that the sale releases further resources and represents another step towards reshaping the bank’s business to concentrate on increasing net lending to its core UK retail and commercial banking customers.
Lloyds’ share price rose 1.14 percent to 79.09p as of 8:38 UTC, compared to a 0.03 percent gain in the blue chip FTSE 100 index.
St. James’s Place share price
Lloyds slashed its stake in St. James’s Place from 57 percent via two sales in March and May, raising almost £1.0 billion. Analysts have been speculating on a further disposal, as a 180-day restriction period on selling shares agreed in May expired on November 25 (Bank tipped to sell at least 12% of St. James’s Place by mid-December). Stockbroker Panmure Gordon has forecast that a sale will trigger a rise in St. James’s Place’s share price, which has underperformed the life insurance sector despite excellent third quarter sales figures. Panmure has a ‘buy’ recommendation on the stock with a target price of 741p. St. James’s Place has a consensus rating of ‘buy’ and an average target price of 655.96p according to a survey of 18 analysts published by Analyst Ratings Network.
St. James’s Place’s share price climbed 0.91 percent to 649.38p by 8:38 UTC, compared to a 0.16 percent rise in the FTSE 250 mid cap index.
Sale of UK corporate real estate loan portfolio
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Yesterday, Lloyds announced the sale of a portfolio of UK corporate real estate loans with a nominal value of £147 million to Cerberus European Investments for a cash consideration of £90 million. The portfolio generated profits of £1.0 million last year. The deal, which is expected to complete by the end of the year, is part of the bank’s continued non-core asset reduction programme and is the third sale of real estate loans in less than two weeks. On December 6, Lloyds announced the £257 million sale of a portfolio of loss-making Irish retail mortgages to Apollo Global Management (NYSE:APO) (Lender sells loss-making Irish home loans for £257mn). A week earlier, the bank quit a distressed portfolio of European corporate real estate loans in a sale to Cerberus Institutional Partners for £860m.
Last month, Lloyds agreed to hand over 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 off its TSB business next year (TSB IPO planned for next year).
**As of 8:25 UTC buy Lloyds shares at 79.00p.**
**As of 8:25 UTC sell Lloyds shares at 78.98p.**
**As of 8:25 UTC buy St. James’s Place shares at 646.50p.**
**As of 8:25 UTC sell St. James’s Place shares at 646.00p.**
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