Lloyds Banking Group has placed on the stock market some 102 million ordinary shares - worth in total about £520 million ($775 million) - in St James’s Place, meaning the bank's stake in the UK wealth manager will fall from 57 to 37 per cent.  

On completion of the placing, Lloyds will hold 185,554,264 St James's Place shares and will continue to have representation on the company's board, the group said in an announcement on the London Stock Exchange yesterday. 

“As a result of the placing, the group will realise a gain on sale of approximately £400 million, including the effect of holding the group's residual stake at fair value,” it added. 

In a separate statement, Lloyds said the move reflects its strategy to simplify the group and focus on its core UK retail and commercial bank, with the proceeds of the placing to be used for “general corporate purposes”. The placing is also expected to increase the group’s net tangible assets per share by approximately 1.7 pence, it added.

Institutional shareholders will be sought for the shares on the group’s behalf by Bank of America Merrill Lynch through an “accelerated bookbuild”, Lloyds said. It added that it has agreed with BofA that it will not, for a period of at least 365 days following completion of the placing, make any further disposals from its remaining holding in St James’s Place.   

On completion, Lloyds said it will no longer consolidate the company's results within its accounts but expects to account for St James’s Place as an associate, reflecting its share of the firm’s profit within its income statement. 

St James’s Place provides wealth management services to individuals, trustees and businesses. The wealth manager has around 140,000 wealth management clients and £34.8 billion in funds under management. Lloyds said that the St James’s Place management team will be unaffected by the sale.