A joint venture between private equity firm Cinven Partners and insurer Hannover Rück paid £250m for the Heidelberger Lebensversicherung business bought by HBOS in 2005.
ELQ Investors II, a subsidiary of investment bank Goldman Sachs, acquired the leveraged loan book for £254m, with another £2m payable within six months if financial conditions are met.
The portfolio is predominantly loans to UK manufacturers and retailers.
The two sales announced yesterday will generate £500m in capital which combined with first half profits, a dividend from Edinburgh-based Scottish Widows and other sales such as Sainsbury Bank means Lloyds has closed £7.2bn of its capital shortfall with second half earnings and further sales still to come.
Heidelberger Leben provides pensions, investment and life assurance products and will be used by its purchasers as a platform for further acquisitions in Germany. Its senior managers will remain in post.
It will also continue to service Lloyds's Clerical Medical policies in Germany and Austria under a long-term administration agreement. That business has proved troublesome for Lloyds which has put £400m aside in provisions for mis-selling.
While Lloyds retains an office in Frankfurt, the Heidelberger Leben deal further reduces its international presence as it seeks to focus on the UK.