Lloyds could sell German insurance arm

Antonio Horta-Osorio: Bank will cut international coverage. Picture: AFP/Getty
Antonio Horta-Osorio: Bank will cut international coverage. Picture: AFP/Getty
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Lloyds Banking Group is mulling the disposal of its German insurance division as it continues its withdrawal from “non-core” international activities.

The state-backed lender – which has also received a raft of bids for its Australian asset finance and commercial lending arms – could announce the sale of Heidelberger Leben as early as this week, reports said.

It is believed to be in talks to sell the business to Hannover Re for about €400 million (£341m) – well below the €1 billion value reportedly put on the business two years ago. The two groups declined to comment yesterday.

Lloyds chief Antonio Horta-Osorio said earlier this month that the group is aiming to reduce its international coverage from 14 countries to fewer than ten by the end of next year, having already announced its withdrawal from 17 markets.

If the sale of Heidelberger Leben goes ahead, Lloyds would continue to offer life insurance to German customers through its Clerical Medical brand.

Along with the possible disposal of the German business, the group – which is 39 per cent owned by the taxpayer – is seeking to offload its Capital Finance and BoS International divisions in Australia as part of its strategy to focus on lending to UK households and businesses.

Firms that are said to have submitted indicative bids for the Australian arm include ANZ Banking Group, Commonwealth Bank of Australia, Macquarie Group and Clydesdale owner National Australia Bank.

A shortlist of three buyers is expected to be drawn up this month, and a deal could be struck by December.