UK-headquartered Lloyds Banking Group Plc is exploring a possible sale of its asset-management unit Scottish Widows Investment Partnership (SWIP), according to media reports.
The move, reportedly, comes as the bank looks to simplify its business structure and bolster its capital reserves. It is unclear at this stage how much the bank would want for the asset-management unit, which has approximately GBP142 billion pounds (US$217 billion) in funds under management.
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Lloyds has hired Deutsche Bank AG (DBK) to assist the potential sale.
Lloyds isn’t the only bank selling stakes in asset- management arms to raise capital. Netherlands’ Rabobank agreed in February 2013 to sell its asset-management unit, Robeco Groep NV, for US$2.5 billion to Japan’s Orix Corp. Dexia SA also said in December 2012 that it had agreed to sell its asset management unit to GCS Capital.
In a 2011 business review, Lloyds said that SWIP was key part of its business. However, pressure has mounted on UK banks to shore up their balance sheets. In March, the 39%-government-owned bank, sold a 20% stake in St James’s Place PLC (STJ.LN), as it looked to cash in on the wealth-management group’s recent share rally.
SWIP was the only fund company of the four largest in Scotland to post a decline in assets during the fourth quarter, the most recent reported period.
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By GlobalDataOfficials at Lloyds and Deutsche Bank, reportedly, declined to comment on any of the talks.
