Lloyds may sell off Scottish Widows

by Richard Kilner

Story link: Lloyds may sell off Scottish Widows

The Scotsman has reported that Lloyds Banking Group is contemplating selling Scottish Widows in a bid to avoid the toxic debt insurance scheme run by the Government.

The bank is also considering raising £15bn in a rights issue, according to the Financial Times, and would be the largest such move made by a British bank were it go ahead.

Presently Lloyds Banking Group is 43% owned by the taxpayer, following the hurried merger between ailing bank HBOS and Lloyds TSB during the height of the financial crisis.

Evading the insurance scheme would enable the bank to avoid paying fees and possibly an increased state stake.

At the end of last month Reuters reported that the bank could be made to sell off the Halifax brand, which it is keen not to do, at the behest of the EU Commission.

European Competition Commissioner Neelie Kroes warned that the bank must not be able to consolidate its predominant market position, as it owed its status to state aid.