by Gill Montia
Lloyds Banking Group is reported to be considering the sale of part of its insurance business.
The group, which has been created through the merger of Lloyds TSB and HBOS, includes Lloyds TSB’s life insurance arm, Scottish Widows, plus HBOS’s Clerical Medical and Halifax Life.
Bearing in mind the group has already announced plans to make cost savings of over £1.5 billion by 2011, streamlining its life insurance operations could become a priority and according to reports, Deutsche Bank has already been instructed to carry out a review of the insurance assets of the enlarged business.
The sale of such assets could also bolster the group’s balance sheet, although it may not be easy to secure a buyer in today’s market.
High Street rival, Royal Bank of Scotland, has been blowing hot and cold over the sale of its insurance business for months.
The bank reportedly rejected an offer from CVC Capital Partners in December, raising speculation that a sale now would not achieve an acceptable price and that the auction would be abandoned for the second time.
Zurich, Generali, Ping An of China and Warren Buffett’s Berkshire Hathaway have all shown interest at some point but eventually walked away.
