Bloomberg News

Lloyds Said to Seek 2.5 Billion Pounds From Branch Sales

July 05, 2011

(Updates with potential bidders in second paragraph.)

July 5 (Bloomberg) -- Lloyds Banking Group Plc, Britain’s biggest mortgage lender, is seeking about 2.5 billion pounds ($4 billion) for the 632 branches it is selling to comply with a European Union ruling on taxpayer aid, two people familiar with the sales process said.

The deadline for the first round of bids is next week, said the people, who declined to be identified because the matter is private. Virgin Money Holdings U.K. Ltd., NBNK Investments Plc and National Australia Bank Ltd. may bid for the branches, according to one of the people. The deadline for the second round will be the end of this month, one of the people said.

The bank is acting before the final report of the U.K. government-appointed Independent Commission on Banking, due in September. The ICB said in its April interim report that London- based Lloyds should sell “substantially” more assets. The bank, 41 percent taxpayer-owned, won’t sell “even one branch more” than the 600 it agreed with the EU and the previous Labour administration, Chairman Win Bischoff said in May.

Lloyds last month sent out a so-called information memorandum to potential bidders for assets including more than a fifth of its 2,900 outlets. The sales document contained a clause that said Lloyds could amend the structure or terms of the agreement prior to signing.

A spokesman for UKFI, which manages the government’s bank stakes, wasn’t immediately available to comment. Spokeswomen at Lloyds and the ICB declined to comment.

The bank plans to cut an additional 15,000 jobs and withdraw from more than half its overseas units as it seeks another 1.5 billion pounds of cost savings, Chief Executive Officer Antonio Horta-Osorio, 47, told investors last week. That will take the total jobs lost since the takeover of HBOS Plc in 2008 to more than 42,000.

--Editors: Francis Harris, Jon Menon

To contact the reporters on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net


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