Lloyds TSB to auction Abbey Life insurance unit

Lloyds TSB to auction Abbey Life insurance unit
LONDON: British bank Lloyds TSB Group Plc is auctioning its Abbey Life insurance unit and the initiative is expected to fetch nearly 1 billion pounds.

Sources familiar with the development said insurers like Resolution and Swiss Re are eyeing the unit. Others in the fray are Sun Capital, U.S. hedge fund Cerberus and private equity fund Blackstone.

The sources said the first round of bids has already taken place and the process may take about a month to complete. Lehman Brothers and Morgan Stanley are said to be managing the auction.

A bank spokesperson refused to comment on the report. The bank's finance chief Helen Weir had said the bank would consider all ways of unlocking more capital from its insurance units.

Lloyds TSB closed Abbey Life to new business in 2000. It is estimated to have about 12 billion pounds worth of policyholder assets. The bank has been trying to sell the unit for the last six months.

In 2006, Resolution has bought Abbey National's closed funds, paying 3.6 billion pounds.

Lloyds TSB, the fifth largest bank in the country, may invest the proceeds in its retail banking business and its growing wholesale unit.