LONDON â€" Lloyds Banking Group, the part-nationalized British bank, agreed on Wednesday to sell a number of its private equity investments to the British firm Coller Capital for around £1 billion, or $1.6 billion.
The move comes as the British bank, which is part owned by local taxpayers after receiving a bailout, looks to shed so-called non-core assets in an effort to shrink its balance sheet.
Under the terms of the deal, the British private equity firm Coller Capital, which specializes in purchasing assets from investors, will buy a portfolio of investments from Lloyds Banking Group worth around £1 billion. The agreement also includes the transfer of £220 million of unused investment capital to the private equity firm, according to a statement from the British bank.
Last year, the portfolio of investments currently owned by the British bank generated a £40 million loss, and will continue to be overseen by Lloyds Banking Group, w hich will earn an annual management fee of £10 million.
Along with other European banks, Lloyds Banking Group is offloading assets in an effort to improve its profitability and reduce its exposure to risky assets.
During the first six months of the year, the British bank cuts its non-core assets to £117.5 billion, a 27 percent decline over the same period in 2011.
Lloyds Banking Group reported a £641 million net loss in the first half of the year after setting aside an additional £700 million to cover costs related to the inappropriate sale of insurance to customers.
The firm also said a number of its employees had received subpoenas or information requests from authorities related to the manipulation of the London interbank offered rate, or Libor.
