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Lloyds Banking announces sale of retail banking operations in Spain

Lloyds Banking Group announces that it has agreed to sell its Spanish retail banking operations, including Lloyds Bank International S.A.U and Lloyds Investment España SGIIC S.A.U, to Banco Sabadell, S.A. The sale comprises the group’s retail and private banking business and the local investment management business in Spain. The business being sold consists mostly of retail mortgages and deposits, with a large portion of non-resident clients. The group is also developing a collaboration agreement with Banco Sabadell which it is expected would involve exploring potential business opportunities in areas including retail, commercial, private banking, asset finance and asset management. Under the sale agreement, the group will receive shares equivalent to approximately 1.8% of the total issued share capital of Banco Sabadell as part of the consideration for the sale. The group intends to be a supportive shareholder of Banco Sabadell and has undertaken to retain the shares received under the sale agreement for a period of at least two years. Total consideration will be payable in a mix of shares and cash. At completion Banco Sabadell will deliver 53.7M ordinary shares out of their treasury holding with such shares being valued a EUR84M by reference to the volume weighted average share price on April 26. An additional consideration of up to EUR20M may be payable in cash within the next five years dependent on mortgage book margins.