Lloyds Banking Group (LBG) and its subsidiary Scottish Widows have decided to terminate a £109bn asset management contract with Standard Life Aberdeen.
Aberdeen’s merger with Standard Life in August 2017 created competition issues, they said.
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The deal to manage the £109bn of assets was signed by Aberdeen in 2014 after it acquired Scottish Widows Investment Partnership from Lloyds.
However, the contract also allowed Lloyds to terminate the contract in the event of Aberdeen merging with a competitor.
Scottish Widows CEO and group director of insurance and wealth Antonio Lorenzo said: “Given the merger of Standard Life and Aberdeen has resulted in our assets being managed by a material competitor, it is now appropriate to review our long-term asset management arrangements to ensure they remain up-to-date and that customers continue to receive good service and investment performance.
“Therefore, we will begin an in-depth assessment of the market to identify a long-term strategic partner, or partners, to manage the current £109bn of assets.”
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By GlobalDataStandard Life Aberdeen co-CEOs Keith Skeoch and Martin Gilbert said: “We are disappointed by this decision in the context of the strong performance and good service we have delivered for LBG, Scottish Widows and their customers. We will be discussing the implications of this with LBG and Scottish Widows.”
Standard Life Aberdeen will take a £40m impairment charge related to the contract termination.
