Monday 24th October 2016                 Change text size:

Lloyds Bank sells remaining stake in St James’s Place

Lloyds - Elliott Brown via Flickr

Lloyds Bank, which remains partly owned by the government, has sold its remaining stake in wealth management firm St James’s Place, raising £680 million.

The bank had a 21% stake in the company after selling the rest of its stake in chunks earlier this year, selling shares for 630p each. The sale is part of the Lloyds banking Group’s strategy to concentrate on its core UK retail and commercial banking customers.

Antonio Horta-Osorio, the group’s chief executive, said, “The group has been reducing non-core businesses and addressing historic issues, while focussing on increasing net lending to its core segments. The sale of the remaining stake in [St James’s Place] releases further resources and represents another step towards refocusing this business on its core customers.”

The capital raised will go to help the bank meet new regulatory requirements under Basel III. The bank said it will increase its common equity Tier 1 capital by around 24 basis points. The bank’s core tier 1 ratio, an indicator of its financial strength, stood at 9.9% at the end of the third quarter with a target to be above 10% by the end of this year.

The government’s share in Lloyds is currently 32.7% following it selling off 6% in September and brining in profits of £61 million. The Treasury is expected to continue selling its stake over the coming years and will eventually sell off all its interests in the banking group.

Lloyds was bailed out in 2008 at the peak of the financial crisis as part of a £20 billion deal. Since then it has faced criticism over bonuses and mis-sold payment protection insurance (PPI). In March, it revealed it had made a loss of £570 million in 2012, mainly down to PPI claims, but still gave the chief executive a £1.4 million bonus.

The bank recently admitted that it has set aside a further £750 million to cover PPI claims. The additional money takes the total Lloyds bill to around £8 billion, compared to the total bill among all banks, which stands at £16 billion.

Further reading:

Aberdeen signs deal to buy SWIP from Lloyds Banking Group

Lloyds Bank sets aside further £750m for PPI claims

Treasury sells 6% of Lloyds stake, raking in £61m for the taxpayer

Customers urged to ditch Lloyds after bank admits ‘issues’ with PPI claims

Lloyds CEO says firm will review use of tax havens

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