LONDON (AFP) - Britain's state-rescued Lloyds Banking Group has agreed to sell its asset management business Scottish Widows Investment Partnership Group to Aberdeen Asset Management for up to £660 million (S$1.3 billion), it said on Monday.

The sale in shares and cash, does not include Scottish Widows, the group's core life, pensions and investment business, Lloyds said in a statement.

"Lloyds Banking Group announces that it has agreed to sell its asset management business Scottish Widows Investment Partnership Group Limited to Aberdeen Asset Management plc for an initial consideration payable in Aberdeen shares with a value of approximately £560 million, and a further deferred consideration, payable in cash, of up to £100 million," it said.

It comes as Lloyds remains on track for a full return to the private sector despite fresh losses announced last month.

The bank is 33 per cent owned by the taxpayer after a government bailout following the 2008 global financial crisis.