Lloyds Banking Group refuses to be drawn on whether it views Scottish Widows as a core asset as speculation mounts over a possible sale or market flotation of the life company following a strategic review of the bank.
In an interim management statement last week, Lloyds confirmed it is over halfway to achieving its target of disposing £200bn in non-core assets. It said: “Previously, we set out our strategy to reduce non-core assets, including non-relationship assets and businesses which are outside our current appetite, by some £200bn from a pool of £300bn. This strategy has been very effective and so far reductions of £126bn have been achieved, with £20.7bn in the first quarter of 2011.”
Lloyds chief executive Antonio Horta-Osorio is undertaking a strategic review of the bank’s businesses, with Scottish Widows a likely candidate for disposal.
A Lloyds spokesman says: “The whole business is being looked at right now. We will know more about the future following the outcome of the internal review.”
While Resolution and Phoenix Life are understood to be considering a bid if the provider is put up for sale, life sector analysts say an IPO is the most likely option. Such a floatation is expected to value the business at between £5bn and £7bn.
The findings of the review are expected at the end of June.