Lloyds Banking Group PLC Pockets £257 Million

The share price of Lloyds Banking Group (LSE: LLOY) (NYSE: LYG.US) is up over 1% at the moment, perhaps partly in reaction to news that, as part of its continuing programme to reduce its non-core assets, the company has disposed of a portfolio of non-performing Irish retail mortgages.

The portfolio, which contains  £610m of gross assets, but generated a loss of £33m for Lloyds in the year to 31 December 2012.has been sold to Tanager Limited, a company affiliated with the the American private equity firm Apollo Global Management, LLC.

As a result of the sale Lloyds will pocket a cash consideration £257m, which it says it will use for “general corporate purposes”.

Although it reduced its stake by 6% in a sell-off to institutions in September, the UK government still owns nearly 33% of Lloyds.  In this week’s autumn statement George Osborne signalled that the next slice will be aimed at the public

While the first sale was aimed at institutional investors, the government would like to give the British public the opportunity to participate directly in future sales when the time is right.

The government will doubtless be hoping to repeat the success — or at least the popularity — of the sale of Royal Mail shares, although there’s little chance of Lloyds’ share price almost doubling in under two months following the next disposal.

Lloyd’s share price currently stands at 78.1p. It’s risen around 63% so far this year, and a whopping 277% since its nadir at the end of November 2011, but still remains nearly 47% down on five years ago.

If you're interested in investing in the banking sector, you should get hold of "The Motley Fool’s Guide To Investing In Banks",

It provides an exclusive take on the investment cases for five FTSE 100 banking heavyweights.

Download your copy now -- its 100% free and comes with no further obligation.


> Jon doesn't own shares in any company mentioned in this article.