Yahoo Finance Lloyds and Schroders agree strategy for £80bn wealth management tie-up
Lloyds and Schroders, two of the City's biggest blue chip companies, have reached an agreement on an £80bn tie-up of their wealth management businesses.
High street bank Lloyds has been looking for a new home for £109bn worth of assets since it announced plans to ditch its long-standing manager Standard Life Aberdeen earlier this year.
Lloyds confirmed it has agreed to transfer the bulk of those assets to Schroders, after striking a separate deal to move £30bn to Blackrock.
Under the terms of the deal Lloyds and Schroders have agreed a three-pronged approach.
The two companies will launch a joint venture offering financial planning and retirement services to affluent customers, which will get £13bn worth of Lloyds and Scottish Widows assets.
The venture will be 50.1pc owned by Lloyds, with the remainder owned by Schroders. Lloyds' Antonio Lorenzo will be named chairman, while Schroders’ James Rainbow will become chief executive.
Lloyds is hoping to benefit from its new partner’s technology and investment management expertise, while Schroders gets access to the bank's huge customer base and branch network.
The duo said they wanted the venture to become a top three UK financial planning business within five years.
Schroders has also sold a 19.9pc stake in Cazenove Capital, its money manager for high net worth clients, to Lloyds. Cazenove will get £400m of Lloyds assets to manage.
Finally, Schroders gets the mandate for managing £67bn worth of the remaining insurance-related assets.
Lloyds hopes to complete the deal as soon as possible, but must first complete an arbitration process with Standard Life Aberdeen, which is resisting its contract being severed.
Expanding Lloyds’ wealth management business has been a key aim for chief executive António Horta Osório since he took the helm at the banking group in 2011.
"This provides a strong platform for growth and is a further step in the delivery of our strategic objectives," said Mr Horta Osório.
Peter Harrison, chief executive of Schroders, added: "In combining our award-winning technology and world-class investment expertise with Lloyds' significant client base and digital capabilities, we are creating a strategic partnership which is exclusively focused on the evolving needs of UK savers and investors."
