Lloyds sells off last overseas insurance units

Tim Wallace
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LLOYDS yesterday sold its German insurance unit, the final step in cutting back its overseas presence in the industry, and key to running down £300bn of non-core operations globally.

The landmark €300m (£256m) sale of Heidelberger Leben to a joint venture firm owned by Hanover Re and Cinven Partners brings to an end the British ownership of the unit which was bought by HBOS in 1995.

The same group will also run Clerical Medical’s operations in Germany, meaning Lloyds no longer runs any insurers outside the UK. However it still has a corporate office in Frankfurt.

Lloyds also sold a portfolio of leveraged loans to ELQ Investors II, a subsidiary of Goldman Sachs, for £254m.

The loans are not distressed – they are all performing and generated profits of £11m in 2012, meaning the sale price is at only a small discount from the portfolio’s gross assets of £283m.

In total Lloyds has now disposed of more than £200bn of non-core assets, leaving less than £100bn left before its plan to re-focus the bank on UK retail and commercial banking is complete.

That remainder is thought to include portfolios of loans across property, troubled businesses and shipping, as well as Irish loans. They come from both Lloyds’ and HBOS’ back books.

The bank has exited 17 countries so far and is now in 11 nations. It wants to get below 10 next year.