Lloyds sells Place stake for £520m

The deal, which has been mooted for some time, will boosts its capital reserves.

Lloyds sold 101.7 million shares to institutional investors for 510p per share, a five per cent discount to St. James’s closing share price on Monday.

The bank will be left with 185 million St. James’s shares, worth 37 per cent of the company.

Lloyds, which is 39 per cent state-owned, has agreed not to sell any more shares for at least a year following the placing.

It acquired the stake when it rescued Halifax Bank of Scotland at the height of the financial crisis.

The disposal will boost Lloyds’ capital position at a time when regulators are preparing to publish a report on the health of Britain’s financial institutions.

The wealth manager has around 140,000 customers and is listed in the FTSE 250 Index with around £35bn of client funds under management.

Lloyds said the stake reduction was part of its strategy to simplify the group and focus on its core customer franchise.

It will continue to have representation on the St James’s Place board but will no longer consolidate the company’s results into its accounts. The placing is due to complete on Friday.

The banking group said: “Lloyds continues to be supportive of the St James’s Place management team, which will remain unchanged as a result of the placing.”