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Lloyds Banking Said to Rule Out Sale of Scottish Widows Unit

Lloyds Banking Group Plc CEO Antonio Horta-Osorio
The London-based bank is examining its strategy following Antonio Horta-Osorio’s appointment as chief executive officer on March 1. Photographer: Chris Ratcliffe/Bloomberg

May 26 (Bloomberg) -- Lloyds Banking Group Plc has ruled out a sale of its Scottish Widows insurance unit as part of a review of the business, two people with knowledge of the matter said.

The London-based bank is examining its strategy following Antonio Horta-Osorio’s appointment as chief executive officer on March 1. Analysts including Evolution Securities Ltd.’s Arturo de Frias have said this might include the sale of Edinburgh-based Scottish Widows.

British banks including Barclays Plc and HSBC Holdings Plc have been reassessing their operations as regulators demand higher capital holdings in the wake of the 2008 U.K. banking crisis. Horta-Osorio, 47, will unveil the review’s conclusions to investors on June 30.

Lloyds this month hired Toby Strauss, CEO of Aviva Plc’s U.K. life insurance business, as group director for insurance. Strauss takes over from Archie Kane, who is retiring, and will join Lloyds on Oct. 3, becoming responsible for running the bank’s life and pensions unit as well as overseeing the insurance division.

Scottish Widows, founded in 1815, was bought by Lloyds 11 years ago and now employs about 3,500 people. The company has assets under management of 122 billion pounds ($200 billion).

Lloyds has sold assets including its Bank of Scotland Integrated Finance investment unit and cut about 27,500 jobs since its 20 billion-pound taxpayer-funded rescue. The bank plans to shrink its balance sheet by 200 billion pounds by 2014.

Ross Keany, a Lloyds spokesman, declined to comment.

To contact the reporters on this story: Gavin Finch at gfinch@bloomberg.net; Ambereen Choudhury in London at achoudhury@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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