Lloyds Banking Group PLC (LLOY.LN), the U.K. bank partly owned by the U.K. Government, said Tuesday it is selling the Bank of Scotland Portfolio Management Service, or PMS, client portfolio and two directly invested discretionary private client portfolios of a similar service within Lloyds TSB Private Banking Ltd. to Rathbone Brothers PLC (RAT.LN) for a consideration based on a percentage of funds under management transferable.

MAIN FACTS:

-Assuming that all of the client funds under management, or FUM, of GBP1.27 billion transferred to Rathbones, total cash consideration payable to Lloyds would be GBP35.4 million.

-In total the proposed transaction would envisage the transfer of around 6,000 customers with GBP1.27 billion of FUM to Rathbones, subject to client consent.

-Following completion of the proposed transaction, Lloyds will continue to manage GBP8.5 billion of assets under management for 35,000 affluent and high net worth clients under its Investment Portfolio Management service which are not part of this transaction. There will be no impact on the day to day banking and lending relationships between the Group and its high net worth clients.

-Lloyds also creating an exclusive distribution agreement with Rathbones whereby affluent U.K. based clients of Lloyds with investable assets of between GBP250,000 and GBP2 million, whose portfolio needs require significant assets in directly held investments, will be referred to Rathbones.

-The agreement has an initial five-year term.

-Following sale, the Group expects 40 role reductions in Edinburgh by the end of 2011.

 
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@dowjones.com