Lloyds Banking Group may sell Scottish Widows

Published on Friday 22 April 2011 18:41

TAXPAYER-backed Lloyds Banking Group is considering a sale of its pensions and insurance business Scottish Widows, it was reported today.

The group's new chief executive, Antonio Horta-Osorio, is poised to offload the Edinburgh-based subsidiary along with a possible sale of the bank's 60 per cent stake in wealth manager St James' Place.

Mr Horta-Osorio is expected to unveil the plans as part of his strategy to focus the business on its core banking services, which he will unveil to investors at the end of June.

Lloyds Banking Group declined to comment.

The group has also been ordered by the European Commission to sell off 600 branches and at least 4.6 per cent of the UK personal current account market and 19.2 per cent of its retail mortgage assets, as a condition of the state aid it has received.

Mr Horta-Osorio recently announced plans to accelerate these sales, which include the disposal of Cheltenham & Gloucester, the TSB brand and Intelligent Finance.

Scottish Widows would reportedly come with a price tag of between 5 billion and 7 billion, while the banking group may also sell fund manager Scottish Widows Investment Partnership (SWIP).

The company began life as a mutual in Edinburgh in 1815, but demutualised and became part of the Lloyds TSB Marketing Group on March 3, 2000. As of January 2009, it became part of Lloyds Banking Group.

The subsidiary, which employs just under 3,500 staff, offers life assurance, pensions, annuities, permanent health insurance, savings and investment products.

The most likely buyer is UK insurance company Resolution Group, which owns Friends Provident, the British life arm of French insurer AXA and Bupa's health assurance division.

Lloyds will update the City on trading for the first three months of the year in the next couple of weeks.