LONDON -- The shares of Lloyds Banking (LSE:LLOY) (NYSE:LYG) gained 0.5 pence to 53.5 pence during early London trade this morning after the FTSE 100 member said it would sell its Spanish retail operations to Banco Sabadell.
Lloyds said the disposal would involve its retail and private banking business as well as a local investment management business in Spain. The bank also confirmed that the operations being sold consisted mostly of mortgages and deposits, and that its Spanish corporate banking division was not included in the transaction.
Under the sale agreement, Lloyds will receive 53.7 million shares of Banco Sabadell, equivalent to about 72 million pounds, or 1.8% of the Spanish bank's share count. An additional consideration of up to 17 million pounds may be payable in cash within the next five years dependent on mortgage book margins.
As of 31 March 2013, the total assets covered by the sale were approximately 1.5 billion pounds, comprised almost entirely of customer lending, and customer deposits were approximately 670 million pounds.
The Spanish operations to be sold reported a loss of around 43 million pounds during 2012, and the deal is expected to create a 250 million-pound loss within the group accounts of Lloyds.
Lloyds said the transaction was in line with the group's strategy of "rationalising its international presence while ensuring best value for shareholders."
This morning's news comes less than a week after Lloyds announced it would float TSB Bank on the stock market. Lloyds is set to reveal its first-quarter results tomorrow and will hold its annual general meeting on 16 May.
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