Lloyds nets £520m from St James’s share sale

The state-supported lender has sold 101.7 million shares for 510 pence per share, reflecting a discount of around five per cent on St James’s closing share price on Monday.

The placing will increase Lloyd’s core tier 1 capital by approximately £600m and its core capital ratio by around 20 basis points. Net tangible assets per share will also rise by around 1.7 pence, the bank said.

Settlement will take place on March 15, leaving the bank with around 185m St James’s shares or approximately 37 per cent of the firm’s issued share capital.

Lloyds will continue to have representation on the St James’s board.

The bank said it has agreed not to sell any more shares for at least a year following the placing.

Lloyds, which is 39 per cent state-owned, inherited its stake as a result of its rescue of HBOS during the financial crisis.

Speculation about a possible sale has held back the wealth manager’s share price, according to some analysts, prompting chief executive David Bellamy to say in 2010 that any plans by Lloyds to offload the stake had been shelved for the time being.

Its shares have risen 26.8 per cent since the start of the year.

Last month St James’s Place, which sells a broad range of financial products, including a suite of mutual funds hand-picked from across the industry, raised its dividend by a third and said it planned a similar increase in the coming year.

It has booked consistent flows of new funds throughout the financial crisis from clients who want to protect nest eggs from the ravages of low interest rates as they near retirement.