Lloyds to sell £500m stake in St James’ Place

Tim Wallace
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LLOYDS surprised markets last night, announcing the sale of £500m of shares in wealth management group St James’ Place.

The bank had previously ruled out further sales for a year after selling a 20 per cent stake in the unit in March.

Since then it has made other sales including of its Spanish retail arm, raising capital for the group.

It came as George Osborne revealed he will soon lay out plans to sell the state’s stake in Lloyds and RBS, shortly after the banks’ capital plans were approved by the Bank of England.

The privatisation plans will be published shortly after the parliamentary banking commission sets out its plans for the regulation of the industry in the coming months.

The two will not need to issue more shares or convertible bonds after the regulator declared they are in increasingly good shape. The Bank had previously warned of a black hole of £50bn in lenders’ capital buffers, with much of the gap at RBS and Lloyds.

The prudential regulation authority feared banks were underestimating the riskiness of their loans and would need to raise more capital.

Those estimates were later revised down to £25bn, then £12.5bn and now it has emerged the banks’ internal reshuffle of resources means no additional external capital is needed. Now both Lloyds and RBS expect their core tier one Basel III capital ratios to hit nine per cent by the end of the year.

“We are pleased with RBS’ progress and momentum towards completing RBS’ return to full financial health,” said RBS chief Stephen Hester.

Lloyds’ boss Antonio Horta-Osorio echoed his sentiments: “Our strong capital position enables the group to actively support growth and lending.”