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April 30, 2013updated 04 Apr 2017 3:17pm

Lloyds take £250m hit on sale of Spanish unit to Sabadell

Lloyds Banking group will take a £250m hit to their group accounts following the sale of their Spanish banking operations.

By Anthony Climpson-Stewart

Lloyds Banking group will take a £250m hit to their group accounts following the sale of their Spanish banking operations.

The sale to Spanish bank, Banco Sabadell announced on 29 April, includes their retail and private banking business and their local investment management business in Spain, following a £43m loss in 2012.

The deal is expected to be finalised this year and will see Lloyds receive £72m worth of shares in the Spanish bank and £17m in cash paid over the next five years, hinged on the performance of the business sold.

The total assets of the sale were £1.5bn, plus customer deposits of £670m.

Other deals on the horizon.

The Spanish sale comes following speculation US financial services company Ameriprise Financial (AMP) is making a bid for their UK assets management arm Scottish Widows Investment Partnership (SWIP).

AMP, are rumoured to be leading a group of bidders who are making $1.22bn play for the business, although when PBI last contacted Lloyds they refused to comment.

The Spanish deal comes as part of strategy implored by Lloyds to re-focus on their UK retail business and help shore up their balance sheet, in March the bank sold off a third of its stake in wealth management firm St James Place.

Despite the loss on the sale of their Spanish business, Lloyds reported their underlying profit had increased by over £1bn from the same quarter last year to £1.48bn.

The deal is subject to regulatory approval and is expected to be completed this year.

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