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LONDON -- Lloyds Banking Group (LSE: LLOY ) (NYSE: LYG ) this morning announced the latest disposal in its continued "non-core asset reduction," in the form of selling a portfolio of US residential mortgage-backed securities to a number of different institutions for a cash consideration of £3.3 billion.
With a book value of £2.7 billion, the transaction will gift Lloyds around £540 million prior to tax, which will be reinvested into the company for "general corporate purposes."
As part of the sale, Lloyds' pension trust also sold its £805 million (book value) share of the portfolio, to realize a pre-tax gain of £360 million. Management said that this will go toward reducing the deficit in the scheme.
Representing further reduction in its risk-weighted assets, this morning's statement from the 39%-taxpayer-owned bank claimed that the sale will lift the group's core tier 1 capital by around 47 points (£1.4 billion capital equivalent).
Today's news follows last week's disposal of 77 million shares in St. James's Place for £450 million, while Lloyds also reassured investors by saying that it is unlikely to need to raise further funds from shareholders, instead using cash generated from its business and disposals like today's to raise capital needed to absorb future losses on loans.
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