Lloyds TSB 'facing defeat in NZ sale'

SPECULATION is mounting that Lloyds TSB may be forced into a full or partial float of its National Bank of New Zealand as bidders drop out of the running for a trade sale.

In a research note, Goldman Sachs says there is a significant gap between buyer and seller expectations in the sale. While Lloyds is hoping for some A$6.5bn (£2.7bn), 'potential buyers are looking at a number well south of this', says Goldman.

Australian bank Westpac has pulled out of the running, leaving only ANZ and an unfancied syndicate of Kiwi businessmen. ANZ, which holds 14% of the New Zealand retail banking market, faces huge regulatory hurdles.

Lloyds denies a lack of interest, maintaining there are 'a number' of interested buyers.

Speculation remains that HSBC, which recently bought a A$1.6bn parcel of New Zealand mortgages from AMP, could be in the hunt. If it chooses a float, Lloyds will be taking the same route as insurer Royal & SunAlliance, which opted for a A$1.9bn offering of its Australasian general insurance business after failing to find a trade buyer.