Lloyds is expected to sell off parts of its asset base in order to comply with EU competition laws on banks that have received state aid. It is expected to sell off parts of its Cheltenham & Gloucester chain, parts of its Lloyds operations in Scotland and its online mortgage and savings business Intelligent Finance.
The EU competition commissioner Neelie Kroes is understood to have unofficially indicated that she would approve the sales, according to the Financial Times.
Lloyds is planning to raise £21bn through a rights issue of £13bn and by issuing £7.5bn of convertible bonds. The £13bn rights issue will be the biggest one ever undertaken in the world.
The Chancellor gave his support to the scheme yesterday saying the Government would take up its full allocation of new shares to maintain its 43.5 per cent stake. This would add around £6bn to the £17bn already pumped into the bank by the Government since January.