Yahoo Finance Standard Life Aberdeen fights to keep £109bn Lloyds fund mandate
The battlelines have been drawn between one of the UK's biggest asset managers and one of its biggest banks after Standard Life Aberdeen hit back at Lloyds Bank for attempting to pull a contract worth £109bn.
Standard Life Aberdeen, the company created in an £11bn deal last summer, said that it did “not agree” with Lloyds’ assertion that the two firms were in “material competition in the UK” following the merger.
In a surprise move, Standard Life said today that Lloyds Banking Group and its subsidiary Scottish Widows did not have the right to pull their business. The contract brings in about £129m of annual revenue for Standard Life Aberdeen, representing around 4.4pc of its pro forma revenue last year, it said.
Lloyds responded that it was “disappointed by the comments made by Standard Life Aberdeen, particularly in the light of our position as a major customer”.
“Standard Life Aberdeen is a clear and material competitor of Scottish Widows and Lloyds Banking Group in the UK and to suggest otherwise is not credible,” the bank added.
Aberdeen began managing assets for Lloyds' Scottish Widows in 2014 when it bought Scottish Life Investment Partnership from the bank. However Lloyds said it had the right to axe the deal if Aberdeen joined forces with a competitor, as it did with Standard Life last August.
Earlier this year Lloyds said it would be terminating its agreement with Standard Life Aberdeen.
At the time, Scottish Widows' chief executive Antonio Lorenzo said the deal meant that its assets were now "being managed by a material competitor", adding that the group had started assessing the market to find an alternative.
Lloyds said today it was “confident” of its legal position and was “surprised at the course of action pursued by Standard Life Aberdeen”.
The bank noted that “in any event management of the funds in question would have ended formally under the terms of the contracts in March 2022”.
The two companies are engaging with each other within the framework of the dispute resolution process in their contract and meetings are expected to be held between senior executives at each of the firms over the next few weeks.
In February Standard Life Aberdeen said it was selling the majority of its insurance business to smaller rival Phoenix Group for £3.2bn.
At the time, Standard Life Aberdeen’s co-chief Keith Skeoch said: "We haven't done this transaction to solve the competition issues [with Lloyds]," Mr Gilbert added. "We have a very good relationship with Lloyds, it was more out of sadness that we reached where we were."
