Westpac Among Banks Said to Bid for Lloyds Australia Assets
Westpac Banking Corp. (WBC), National Australia Bank Ltd. (NAB) and Macquarie Group Ltd. (MQG) are among banks that made preliminary bids for Lloyds Banking Group Plc (LLOY)’s Australian assets, two people with knowledge of the matter said.
The indicative offers for Lloyds International Pty, which includes its Capital Finance and BOS International units, were due yesterday and the sale may fetch more than A$1 billion ($910 million), said the people, asking not to be identified because the details are private.
Britain’s biggest mortgage lender, part-owned by the U.K. government, is off-loading assets it no longer considers essential as it shrinks its balance sheet after a government bailout in 2008. Lloyds said on June 20 it was making “significant progress” in strengthening its capital position. European banks are bolstering their balance sheets through asset sales as they try to meet stricter capital rules.
Goldman Sachs Group Inc. is advising Lloyds on the potential sale, the people said. The banks’ interest was reported earlier by the Australian Financial Review.
Supreet Thomas, a Sydney-based spokeswoman for Westpac, said the bank wouldn’t comment on market speculation, as did Meaghan Telford, a Melbourne-based spokeswoman for NAB. Lisa Jamieson, a Sydney-based spokeswoman for Macquarie, declined to comment.
Lloyds International reported a loss of A$148.3 million in 2012, narrowing from a shortfall of A$1.2 billion the previous year, according to filings with the Australian Securities & Investments Commission. The division reduced assets by 24 percent to A$12.2 billion last year, according to the documents.
The Capital Finance unit, which provides retail, equipment and commercial financing services, has more than A$6 billion in assets and equity of more than A$2 billion, a person familiar with the matter said July 5.
Lloyds, based in London, was already selling a A$750 million package of about 12 to 14 loans it defines as “non-core” in Australia, people familiar with the matter said in July. It sold some distressed corporate loans to investors backed by KKR & Co. (KKR) in November, and 809 million pounds ($1.2 billion) of real estate loans to a joint venture between Morgan Stanley and Blackstone Group LP (BX) in June.
The U.K. government, which owns 39 percent of the bank, is considering selling as much as 5 billion pounds of Lloyds shares to money managers as soon as this month as a first step to reducing its holding in the lender, a person with knowledge of the plan said in July.