UK banking group Lloyds has trimmed its holding via a placing of shares in wealth management outfit St James's Place in an effort to strengthen its capital cushion.

The lender place nearly 102m shares at 510p a share, raising gross proceeds of around £520m, trimming its stake from 57% to 37%. It will realise a gain of around £400m on the placing.

The move will increase Lloyds' core tier-one capital ratio - a measure of the bank's financial strength enforced by regulators - by around 20 basis points and will raise its net tangible assets per share by 1.7p.

Lloyds' interest in St James's Place contributed £76m in profit after tax in 2012. However, the latter's shares have risen strongly in the past few months, jumping from 400p in December to 536.5p by Monday's close.

In a separate statement on Monday evening announcing its intended placing, Lloyds said: "The placing reflects Lloyds' strategy to simplify the group and focus on its core customer franchise. The proceeds of the placing will be used for general corporate purposes."

Related share prices
Lloyds Banking Group (LLOY) share price
St James's Place (STJ) share price