Lloyds Banking Group said on Tuesday it had agreed to sell a 1.05 billion pound ($1.65 billion) portfolio of private equity investments to Coller International Partners as it continues to shed riskier assets following its 2008 bailout.
Coller is buying the portfolio for 1.03 billion pounds in cash. The deal includes the transfer of undrawn commitments that are expected to be worth 220 million pounds at completion.
Lloyds, in which the government holds a 40 percent stake, said the transaction is expected to boost its pretax 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 pounds each year.
The bank shed 53 billion pounds worth of non-core assets from its balance sheet in 2011 and over 23 billion pounds 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.