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Lloyds expects to raise £680m with final SJP sale

According to a statement issued to the London Stock Exchange, the bank’s remaining 109m shares in SJP are now up for sale at 630p a share, with the bank aiming to raise around £680m in gross proceeds.

It marks the third and final time the bank has divested shares in SJP this year, after the deal was waved through by the bank’s financial advisers, Bank of America Merrill Lynch.

In March, Lloyds sold approximately £400m worth of SJP shares with the promise that it would maintain its reduced stake in the wealth manager for at least one year. However, the bank put a further £77m worth of shares up for sale in May.

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The move will also aid Lloyds’ attempts to boost its underlying capital levels to comply with new European Basel III legislation, raising its common equity Tier 1 capital by about 24 basis points.

Lloyds also sold Scottish Widows Investment Partnership to Aberdeen Asset Management in a deal worth £660m last month.

David Bellamy, chief executive of SJP, said: “We would like to thank Lloyds for the supportive role it played as shareholder.” He added that he was pleased with the “breadth and quality of his new shareholder list”.

In a statement, António Horta-Osório, group chief executive of Lloyds Banking Group, said: “The group launched its strategy in 2011 to reshape the business to concentrate on its core UK retail and commercial banking customers.

“As part of that approach, the group has been reducing non-core businesses and addressing historic issues, while focusing on increasing net lending to its core segments.”

Industry reaction:

Ian Gordon, banking analyst at Investec Securities, said: “The sale of SJP allowed Lloyds to eliminate duplication and crystallise a gain. An added incentive was to dispose of its entire holding prior to the year end for capital purposes.”

Keith Churchouse, director of Surrey-based Chapters Financial, said: “With SJP doing quite well, now is the time to capitalise on that asset. I would not be surprised if the bank sold off other assets to bring itself back to a profitable position before re-emerging in private hands.”