Lloyds sells private equity investments for £1.05bn

Coller is buying the portfolio for £1.03 billion in cash. The deal includes the transfer of undrawn commitments that are expected to be worth £220 million at completion.

Lloyds, in which the taxpayer holds a 40 per cent stake, said the transaction is expected to boost its pre-tax profit. Following the sale, the bank said it will continue to manage the fund in return for a management fee, which is likely to be less than £10 million each year.

The bank shed £53 billion worth of non-core assets from its balance sheet in 2011 and over £23 billion of non-core assets so far this year.

It is looking to reduce its loan book, cut costs and rein in bad debt as part of a recovery plan instigated by chief executive Antonio Horta-Osorio.

The transaction is due to complete in the fourth quarter.