UK lender Lloyds is to dispose of its loss-making Spanish retail and private banking operations in an effort to continue its strategy of 'rationalising' its overseas presence and ensuring best value for shareholders, the group said on Monday.
Lloyds Bank International and Lloyds Investment Espana SGIIC, which had total assets of £1.5bn at March 31st, are to be sold to Spanish peer Banco Sabadell for a mix of shares and cash.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Lloyds is to hold on to its corporate banking operations in Spain serving business clients.
Under the agreement, Lloyds will receive 53.7m shares in Sabadell, equal to a 1.8% stake valued at €84m (£72m). An additional €20m (17m) will be paid within five years subject to future mortgage book margins.
The bank said that cash proceeds from the sale will be used for "general corporate purposes".
The Spanish businesses reported a loss of around £43m in 2012, which included a 90% jump in the impairment provision as a percentage of impaired loans.
"The sale of the business is currently expected to lead to a loss on disposal of approximately £250m in the group's accounts," Lloyds said.
-
Norfolk or Norway? Holidays you can afford with different-sized pension potsMany people look forward to taking more holidays when they retire. But what sort of trips could your pension buy you? We look at the holidays to match different retirement incomes
-
Q&A: Issac Thong – new lead manager of Aberdeen Asian Income Fund
