Scottish Widows may be sold off as new boss reviews Lloyds’ services

Lloyds has dismissed “speculative” reports that its new chief executive is poised to put the Scottish Widows business up for sale as part of his review of the bank.

Antonio Horta-Osorio is due to reveal the findings of his strategic review this June, and is expected to say that he will focus the group on core banking services.

It has been suggested that he will also look to offload the bank’s 60 per cent stake in St James’s Place, the upmarket wealth manager, which has an office in Leeds.

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The group has been ordered by the European Commission to sell off 600 branches and at least 4.6 per cent of the UK personal current account market and 19.2 per cent of its retail mortgage assets, as a condition of the state aid it has received.

Mr Horta-Osorio plans to accelerate these sales, which include the disposal of Cheltenham & Gloucester, the TSB brand and Intelligent Finance.

Scottish Widows would come with a price tag of between £5bn-£7bn, according to a report yesterday, while the banking group may also sell fund manager Scottish Widows Investment Partnership.

The company began life as a mutual in Edinburgh in 1815, but demutualised and became part of the Lloyds TSB Marketing Group in 2000. As of January 2009, it became part of Lloyds Banking Group.

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The subsidiary, which now employs just under 3,500 staff, offers life assurance, pensions, annuities, permanent health insurance, savings and investment products.

The most likely buyer is Resolution Group, which owns Friends Provident.

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