UPDATE: Lloyds Bank Sells Halifax Estate Agency For GBP1
October 16 2009 - 4:09AM
Dow Jones News
Lloyds Banking Group PLC (LYG), which is 43.5%-owned by the U.K.
government, said Friday it has agreed to sell its loss-making
Halifax Estate Agencies business to LSL Property Services PLC
(LSL.LN) for GBP1 as part of its ongoing strategic review.
The bank said the move won't have a material impact on its
accounts. Halifax Agencies include a network of 218 offices and 93
franchise operations.
The Lloyds' Halifax brand isn't included in the sale, and the
Halifax Estate Agency will eventually be renamed as one of LSL's
existing networks, either as Your Move, Reeds Rains or
Intercounty.
"The decision to sell the estate agency business, which has been
loss-making for some time, follows a strategic review undertaken by
the group which concluded that an estate agency operation is no
longer integral to its business model," Lloyds said.
Lloyds, which hit financial problems during the credit crunch
when it took over the troubled U.K. lender HBOS, is currently
looking at ways of reducing its dependence on the U.K. government
and is reported to be drawing up plans that will allow it to avoid
having to insure GBP260 billion worth of risky loans and
investments through the state-backed asset protection plan.
The LSL deal should be completed in January, when around 1,000
estate agency staff will transferred. Overall, Lloyds expects 360
job losses.
A London-based analyst said the sale was a positive step for the
U.K. bank and that, although the disposal has no material impact on
Lloyds' earnings forecasts, "the Halifax Estate Agencies unit was
loss-making and it is a positive step by Lloyds to dispose of such
an asset to strengthen their balance sheet."
David Nicholson, managing director of Halifax Community Bank,
said: "Halifax Estate Agency is a well-established business and,
following a strategic review, we believe that it is better able to
grow outside the group with a strong existing player in the market
such as LSL Property Services."
As part of its ongoing restructuring, Lloyds said Thursday it
may sell some of its investment management assets, including Bank
of Scotland Portfolio Management Services, to Rathbone Brothers PLC
(RAT.LN).
At 0727 GMT, Lloyds Bank shares were up 4 pence, or 4.2%, at 95
pence, outperforming the Stoxx Europe 600 banks index, which was up
by around 1%. The shares have fallen by 15% over the last year. LSL
was up 13 pence, or 5%, at 275 pence.
Company Web site: http://www.lloydsbankinggroup.com
-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748;
digby.larner@dowjones.com
(Ishaq Siddiqi contributed to this article.)
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