By Mark Kleinman, City Editor Lloyds Banking Group is preparing to launch a string of deals at its insurance arm as the Government nears the sale of its remaining stake in the high street lender. Sky News has learnt that Lloyds has in recent weeks held a beauty parade of investment banks to advise on acquisition targets for Scottish Widows, one of the country's biggest life insurance and pensions providers. Bankers will work alongside McKinsey, the management consultant, on identifying assets in the corporate pensions and bulk annuities sectors during a period when Britain's pensions market is undergoing radical reforms engineered by George Osborne, the Chancellor. The news raises the prospect of a takeover spree in which Lloyds will invest hundreds of millions of pounds as it seeks to expand its market share in areas beyond its core high street retail and business banking services. People close to Lloyds said its plans should dampen lingering speculation that the bank might be interested in pursuing a long-rumoured sale of its insurance arm. Instead, it underlines the extent to which Lloyds is trying to embrace its imminent freedom from the clutches of taxpayers, with the Government's shareholding - now below 9% - likely to be sold later this year. A Lloyds spokesman told Sky News: "We are looking at how we continue to focus on growing our insurance business where we believe we have competitive advantage through our sector expertise and scale. "We have no plans to review our Insurance business more broadly or to consider divestment." Scottish Widows was founded in 1815 as Scotland’s first mutual life office and has long been one of the UK's most recognised brands across the life, pensions and investment sectors. Its fund management arm was acquired by Aberdeen Asset Management two years ago, with Lloyds taking a minority stake in the enlarged company. The expansion of Scottish Widows is part of a three-year strategy outlined last year by Antonio Horta-Osorio, Lloyds' chief executive. Six months ago, Toby Strauss stepped down as head of the insurance business, and was replaced by Antonio Lorenzo, an existing Lloyds executive. The changes come amid radical reforms of the UK pensions industry, with new freedoms introduced to allow consumers to take greater control of their retirement savings. Earlier this week, the City watchdog said it would launch a pensions market review and consider additional measures to protect consumers cashing in their savings pots as part of its business plan for the next 12 months.
Lloyds is arranging a string of acquisitions at its insurance arm, Scottish Widows, just as the Government nears the sale of its remaining stake. Reports suggest that the bank held a beauty parade of investment banks as it plans to launch a series of purchases for the provider; it is said to be targeting corporate pensions and bulk annuities acquisitions. A spokesman for Lloyds said "we are looking at how we continue to focus on growing our insurance business where we believe we have competitive advantage through our sector expertise and scale".