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Lloyds adds another £263m to its capital coffers
by Sarah Miloudi on Sep 24, 2013 at 13:17
Lloyds has taken another step forward in its plan to slim down its non-core assets by letting go of a portfolio of European commercial property loans.
Promontoria Holding, an affiliate of Cerberus Institutional Partners, will take on the real estate loans book in exchange for €312 million (around £263 million) in cash.
Lloyds said that while the sale was unlikely to have a material impact on the group, it was part of its ongoing strategy of reducing its non-core balance sheet and would be 'capital accretive' on a Basel III basis, a set of rules introduced to improve banks' ability to better cope with economic and financial stress.
The bank struck a similar deal last month when it let go of a portfolio of levered loans for roughly £254 million, and the week before it sold its German life insurance business, Heidelberger Lebensversicherung, for around £250 million.
Like a number of banks, Lloyds has long been keen to cut back on assets outside its core focus and in June it told the stock market it had made 'significant progress' in boosting its capital position.
It said by the end of that month it expected to meet core tier one ratio rules, some six months ahead of schedule, and was on track to meet the Prudential Regulation Authority's requirement for £8.6 billion of additional capital.
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