Lloyds Banking Group sells off £1bn of private equity assets

The unusual array of assets that Lloyds Banking Group acquired when HBOS was rescued during the banking crisis was highlighted on Wednesday when the bailed-out bank sold off 71 private equity related investments for £1bn. Lloyds, which is 40% owned by the taxpayer, sold the loss-making portfolio to specialist investment house Coller Capital and will receive £10m a year in management fees for continuing to look after the funds. The sell-off is part of the strategy to "de-risk" the Lloyds' balance sheet and is expected to be followed by other attempts by chief executive Antonio Horta-Osorio to rid the bank to troublesome assets. The private equity investments were part of the so-called integrated finance arm that was created inside HBOS in the run up to the banking crisis and eventually led to Lloyds conducting a rescue takeover of the bank. This particular bundle of investments generated losses of £40m last year and the proceeds of the sale will be used for "general corporate purposes". The bank reduced its so-called non-core business in the first six months of 2012 by £23bn, on top of £53bn the year before.