Bailed-out bank sells the loss-making portfolio to specialist investment house Coller Capital as part of its ‘derisking’ strategy
The unusual array of assets that Lloyds Banking Group acquired when HBOS was rescued during the banking crisis was highlighted on Wednesday when the bailed-out bank sold off 71 private equity related investments for £1bn.
Lloyds, which is 40% owned by the taxpayer, sold the loss-making portfolio to specialist investment house Coller Capital and will receive £10m a year in management fees for continuing to look after the funds.
The sell-off is part of the strategy to “de-risk” the Lloyds’ balance sheet and is expected to be followed by other attempts by chief executive Antonio Horta-Osorio to rid the bank to troublesome assets.
The private equity investments were part of the so-called integrated finance arm that was created inside HBOS in the run up to the banking crisis and eventually led to Lloyds conducting a rescue takeover of the bank.
This particular bundle of investments generated losses of £40m last year and the proceeds of the sale will be used for “general corporate purposes”. The bank reduced its so-called non-core business in the first six months of 2012 by £23bn, on top of £53bn the year before.