Scottish Widows Investment Partnership sale mooted

The Scottish Widows Investment Partnership's Edinburgh headquarters. Picture: Neil Hanna

Sources said yesterday that Lloyds, run by Portugal-born chief executive Antonio Horta-Osorio, had hired Deutsche Bank’s investment banking arm to advise on the potential sale of SWIP.

It is believed Deutsche Bank has been informally gauging market appetite among possible buyers of the Scottish fund manager, but has not started a formal sale process. The wider Scottish Widows insurance business is understood not to be up for sale.

City banking analysts said last night that Lloyds would use the cash from any sale, at a time when fund manager valuations are riding high again, to continue rebuilding its balance sheet following the near-collapse into public ownership in 2008.

Lloyds Banking Group and Deutsche Bank refused to comment last night. A Swip spokesman said: “We don’t comment on market rumour or speculation.”

Horta-Osorio has been attempting to shrink Lloyds’s balance sheet, which became bloated after the disastrous acquisition of HBOS in 2008 led to it being bailed out by the taxpayer.

Lloyds, and equally partly taxpayer-owned Royal Bank of Scotland, were two of the main banks the Bank of England (BoE) had in mind when it warned last month that Britain’s high street lenders needed to find another £25 billion to cover a “black hole” in the  sector’s capital cushions.

The BoE said this figure related to bigger potential losses on commercial property, which Lloyds is heavily exposed to via HBOS, further possible fines for product mis-selling, and continuing pressures from the eurozone area.

The same month Horta-Osorio announced that Lloyds is to sell a 20 per cent stake in successful City wealth manager St James’s Place.

Swip made a profit before tax of £108 million in 2012. It has funds under management of £147bn, and has about 500 staff, mainly in Edinburgh. Lloyds paid £7.3bn for Scottish Widows, including the insurance and fund management business, in 2007.

FORMER financial regulator John Tiner is understood to have withdrawn from leading a bid to buy 316 bank branches from Royal Bank of Scotland.

Sources said Tiner, chief executive of the now-disbanded Financial Services Authority between 2003 and 2007, is stepping away from an offer on the table for the branches backed by private equity player, Corsair Capital.

It is thought that Tiner has decided not to proceed with an involvement, which would have seen him potentially become chairman of a new high street bank based on the branches, ahead of regulatory reports expected to lambast his tenure at the FSA in the run-up to the banking crisis of 2007-8.

Corsair is understood to have told both RBS and the Treasury that Tiner will no longer be involved with its bid. that offer is also being backed by Lord Rothschild’s investment firm, RIT Capital Partners, and Centerbridge, another private equity group. Some analsyts said yesterday that another adviser to Corsair, Lord Davies of Abersoch, a former boss of Standard Chartered bank, might be a possible replacement for Tiner.