Standard Life Aberdeen has won its dispute with Lloyds Bank over the management of £100bn of assets.
The assets were formerly managed by Aberdeen Standard Life on behalf of Lloyds via an agreement due to run until 2022. Following the merger between the two companies, Lloyds attempted to end the agreement early on the basis that Standard Life Aberdeen had become a material competitor.
Standard Life appealed the decision, and an arbitration panel today ruled in its favour.
Laith Khalaf, Senior Analyst at Hargreaves Lansdown, commented: “This is a big victory for Standard Life Aberdeen, and a serious setback for Lloyds’ new foray into wealth management.
“While this is relatively low-margin business for Standard Life Aberdeen, it’s clearly a large sum of money, and against a backdrop of fund outflows, will be particularly well-received. A big part of the rationale for the merger between Standard Life and Aberdeen was built on scale, which £100bn of assets clearly speaks to.
“Lloyds has already ear-marked the lion’s share of these assets to form the basis of its new joint venture with Schroders, and has also hired Blackrock to manage some passive strategies.
Negotiations will now begin between Standard Life and Lloyds to find some sort of resolution. This could involve Standard Life Aberdeen remaining as manager of the assets until 2022, or Lloyds stumping up some cash for breaking the agreement early.”