MortgagesMay 30 2013

Lloyds in £100m sale of international private banking units

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ByEmma Ann Hughes

Lloyds Banking Group has marked a retreat from international private banking by selling a number of branches in separate deals worth more than £100m.

Lloyds’ private bank branches in Geneva, Zurich, Monaco and Gibraltar, and its representative office in Montevideo, have all been sold to Swiss private banking business Union Bancaire Privée.

The total amount, payable in cash, for the transaction is up to £100m, of which about £65m will be paid at closing. The remainder is deferred and payable in the two-year period following completion subject to certain performance targets.

Separately, Lloyds has sold its private banking agency office in Miami to Banco Sabadell. The total consideration in cash is up to a £8m, of which £4m will be received at closing and the rest payable in the year following completion subject to a similar earn-out agreement.

As of 31 March 2013 the assets under management of the international private banking business were about £7.2bn and the total balance sheet assets were about £729m. The business reported a loss of about £50m in 2012.

In connection with the transaction the group will also be closing the Dubai International Finance Centre based private banking business.

The international private bank business offered personalised banking, investment and planning services to high net worth individuals and families.

Lloyds UK-offshore businesses, including the Channel Islands, Isle of Man and Gibraltar, will not be affected by the sale.

In addition the total assets figure includes other clients’ assets such as loans and derivative products which will be transferred to UBP at book value.

The majority of the business is expected to transfer in the second half of 2013 and the remainder by the first quarter in 2014.

In addition to this transaction, Lloyds is pulling out of South Africa.

Going forward, Lloyds bosses said the group’s wealth strategy is focused on serving mass affluent and affluent customers within the UK and Channel Islands, and those with UK connections.