Lloyds set to sell £1.2bn loans

Lloyds Banking Group is in advanced talks to sell a £1.2 billion portfolio of loans as it continues to shed assets following its government bail-out nearly four years ago.

US private equity firm TPG and a division of investment bank Goldman Sachs are thought to be in exclusive talks to buy the portfolio, which includes property and business loans that were largely made by HBOS before it was taken over by Lloyds. TPG and Goldman beat a handful of other bidders for the so-called Project Lundy portfolio.

Lloyds, which is about 40 per cent owned by the UK government, is looking to reduce its loan book, cut costs and rein in bad debt as part of a recovery plan instigated by chief executive Antonio Horta-Osorio to restore the bank to health.