UPDATE 1-Lloyds to sell remaining stake in St James's Place

* Lloyds to sell remaining 21 pct stake in wealth manager

* Lloyds expects to make 95 mln stg from sale

* Sale will improve core tier 1 by 24 basis points

LONDON, Dec 9 (Reuters) - Lloyds Banking Group saidit would bolster its capital by selling its remaining 21 percentstake in wealth manager St James's Place, worth about700 million pounds ($1.15 billion).

The state-backed British lender, 33 percent-owned by thegovernment, is selling non-core assets to strengthen its balancesheet and focus on lending to British households and businesses.

The bank said the placing would increase its common equityTier 1 capital by about 670 million pounds ($1.1 billion), or 24basis points under full Basel III capital rules. Its core tier 1ratio - a gauge of a bank's financial strength - stood at 9.9percent at the end of the third quarter.

"The sale of the remaining stake in St. James's Placereleases further resources and represents another step towardsrefocusing this business on its core customers," Chief ExecutiveAntonio Horta-Osorio said on Monday.

Lloyds is selling 109 million shares to institutions such asinsurers and pension funds and said it expected to make about 95million pounds from the sale.

Lloyds previously sold a 20 percent stake in St James'sPlace in March and a further 15 percent in May. Last month itsold its fund management arm Scottish Widows to Aberdeen AssetManagement for about 660 million pounds.

The share placing was announced after close of trading.Shares in St James's Place closed up 1 percent at 643.5 pencewith Lloyds down 0.1 percent to 78.5 pence.