Lloyds to sell German unit Heidelberger Leben in streamlining move Lloyds Banking Group is selling a German subsidiary and a portfolio of loans for more than £500m in separate streamlining moves that will also help it meet more stringent regulatory capital demands. The partly state-owned bank on Wednesday said it was selling Heidelberger Leben, a German life assurer, to private equity investor Cinven Partners and reinsurer Hannover Re for about £250m. Heidelberger Leben employs about 300 people and has about 600,000 insurance policies. Cinven, whose funds will own 80 per cent of the group, said the purchase would create a platform for a consolidation drive in the German life assurance industry. It said its interest in the group - which became part of Lloyds following its purchase of HBOS in 2008 - was spurred by its experience as a consolidator in the UK market after its purchase of Guardian Financial Services in 2011. For Lloyds, the disposal fits in with a general effort to scale back its international presence. It has left 17 countries over the past two years; it will still retain a corporate office in Germany, though. The deal will result in Lloyds taking a loss on disposal of about £330m in its accounts but it will nonetheless improve its common equity tier one capital by about £0.4bn. The Prudential Regulation Authority, the new UK banking regulator, is pushing banks to hold more capital. Lloyds" balance sheet will also be marginally strengthened by the disposal of the portfolio of loans, which have a face value of £283m but are being sold at a discount to Goldman Sachs for either £254m or £256m, depending on their performance over the next six months. The loans are leveraged, meaning they were extended to companies that already had considerable amounts of debt, so tend to have higher risk attributed to them. They were taken out by companies in the UK and overseas, in sectors including manufacturing and retail. Shares in Lloyds, which needed government support in the wake of its ill-fated rescue of HBOS, were trading 0.5 per cent higher at 74.2p in early morning trading in London on Wednesday. Lloyds reached another milestone in its rehabilitation earlier this month when it said it was ready to start discussions with regulators about resuming dividends. There has also been speculation recently that the UK state is looking to start selling its 39 per cent stake.