One day before reporting its first quarter results, partially nationalised British bank Lloyds has sold its unprofitable Spanish business, taking a heavy loss of almost 300 million euros.
The buyer is Spain’s Banco Sabadell. As part of the deal Lloyds will get a 1.8 percent stake in the lender which is the fifth largest in Spain.
The country’s property crash meant many mortgage holders have been defaulting on their loans. Around two thirds of them are Britons who have bought property in Spain.
The Spanish business lost 43 million euros last year and is set for more losses in the future.
The deal covers Lloyds’ private and retail banking business in Spain, but not the British bank’s corporate banking operations in the country.
Lloyds is cutting its international presence from around 30 countries. It has sold operations or exited from 12 countries in the last two years and has said it wants its presence to be down to less than 15 countries by 2014.
The loss in Spain adds to billions in losses Lloyds has faced in Ireland and Australia. These were mainly from the ill-timed expansion into those countries by HBOS, the poorly run British bank that the British government forced Lloyds to buy in late 2008.