Lloyds Banking Group in talks to sell Clerical Medical unit to Resolution

| August 24, 2009 | 0 Comments

Shares in Lloyds Banking Group rose today on the back of reports that it is in talks to offload its Clerical Medical Unit to Clive Cowdery’s Resolution for up to £4 billion.

Lloyds acquired Clerical Medical when it bought HBOS last autumn.

According to a source, the talks between the banking giant and Resolution are at an early stage, however the bank refused to comment.

Clive Cowdery’s Resolution, which acquired Friends Provident for almost £2 billion, also declined to discuss negotiations but said it is “in talks with several parties”.

Mr Cowdery said: “We are concentrating on our acquisition of Friends Provident and integrating the business, which will take up to three months.”

Last week, Lloyds Banking Group, which is 43% state-owned, announced it was reviewing its decision to close down its Cheltenham & Gloucester (C&G) subsidiary.

In June, the mega-bank said it was closing all of its 160 UK C&G branches with the loss of hundreds of jobs but the decision may now be reversed.

Meanwhile, the disposal of Clerical Medical would allow Lloyds to return some of the taxpayer funds injected late last year, or help it pay £1 billion to opt out of the Government’s Asset Protection Scheme, which insurers against losses arising from toxic assets.

However, Lloyds has also been reported to be looking to raise between £10 - £15 billion by selling new shares.

Clerical Medical was founded in 1824 to help the families of doctors and clergymen and is now one of the biggest pension and investment providers.

Tags: Clive Cowdery, , , Resolution,

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