Lloyds trims stake in St James's Place to bolster capital

UK banking group Lloyds has trimmed its holding via a placing of shares in wealth management outfit St James's Place in an effort to strengthen its capital cushion.

The lender place nearly 102m shares at 510p a share, raising gross proceeds of around £520m, trimming its stake from 57% to 37%. It will realise a gain of around £400m on the placing.

The move will increase Lloyds' core tier-one capital ratio - a measure of the bank's financial strength enforced by regulators - by around 20 basis points and will raise its net tangible assets per share by 1.7p.

Lloyds' interest in St James's Place contributed £76m in profit after tax in 2012. However, the latter's shares have risen strongly in the past few months, jumping from 400p in December to 536.5p by Monday's close.

In a separate statement on Monday evening announcing its intended placing, Lloyds said: "The placing reflects Lloyds' strategy to simplify the group and focus on its core customer franchise. The proceeds of the placing will be used for general corporate purposes."