Lloyds TSB has announced the sale of its Abbey Life insurance unit for almost £1 billion
Lloyds said it had agreed to sell Abbey Life to Deutsche Bank for £977 million in cash. It said the closed life insurance business was not a core strategic asset and that the sale further improves its capital efficiency.
Combined with a 15 per cent rise in underlying earnings and its first dividend increase in five years, the bank's upbeat tone lifted Lloyds shares 4.1 per cent to 556.5 pence earlier today.
The bank raised its interim dividend by 5 per cent to 11.2 pence per share, which it said showed it was "increasingly confident in the group's earnings prospects for 2007 and beyond".
Lloyds is the country's highest yielding bank - offering over 6 per cent - despite not raising the payout since 2002.