Lloyds mulls buybacks after NZ sale

LLOYDS TSB is considering a share buyback programme after clinching the long-awaited sale of its New Zealand business on Friday for £2.25bn.

The price was less than Lloyds had originally hoped for, but dealers on Friday welcomed the disposal, which strengthens the balance sheet and eases worries about the dividend. The shares rose 5 3/4p to 416 1/4p.

ANZ Banking Group is paying £2.05bn plus a £200m dividend for the business, National Bank of New Zealand. Lloyds said it would book £1.1bn profit on the sale and added that its options for the sale proceeds included 'supporting business growth, some strengthening of capital ratios and other means of enhancing shareholder value, including the purchase of group shares'.

During negotiations, Lloyds was hampered by the fact ANZ was the sole bidder after rival Australian banks Westpac and Commonwealth Bank of Australia pulled out of the race. ANZ plans to fund the acquisition by raising A$3.6bn (£2.12bn) through a two-for-11 rights issue at the heavily discounted price of A$13.