Lloyds' ship coming in for £6bn sale of loans

Published on Thursday 7 April 2011 15:53

Lloyds Banking Group stonewalled City speculation yesterday that it is in advanced talks with a string of suitors for its portfolio of about $10 billion (£6bn) of shipping industry loans.

The prospective sale of the loans comes as the group, 41 per cent owned by the taxpayer, continues its sale of non-core assets to beef up its balance sheet.

Lloyds, owner of Bank of Scotland, Scottish Widows and Halifax, is believed to be on the brink of receiving firm offers for the shipping loans portfolio.

Banking analysts said last night that bidders in the frame would probably include some banks from Japan and other parts of Asia.

It is understood the sale would exclude leases on ships owned by Lloyds, which received an aggregate 17bn bailout from the taxpayer after its rescue acquisition of an embattled HBOS at the height of the financial crisis. Lloyds declined to comment yesterday on the shipping loans auction.

Goldman Sachs is handling the sale on behalf of the group. But it was not clear how much of a discount to par value Lloyds will have to sell the loan-book at in order to secure a buyer. It is understood the auction has been going for several months, pre-dating the arrival of Antonio Horta-Osorio as Lloyds's chief executive in succession to Eric Daniels.

Horta-Osorio, who joined recently from Santander UK, is likely to set out in a strategic review in June for other non-core assets.

These include lending to project finance, as well as the bank's private equity arm, LDC, according to people close to Lloyds.

Royal Bank of Scotland, 83 per cent owned by taxpayer after its 45bn taxpayer recapitalisation, is also seeking to offload non-core assets, including several hundred million euros worth of Spanish property loans.