Investment giant Schroders has confirmed it is in discussions with Lloyds Banking Group over merging their wealth management businesses.The tie-up will see two of the City’s biggest players join forces, with Lloyds benefiting from its new partner’s technology and investment management experience and Schroders gaining access to the vast customer network of the country’s biggest high-street bank.
A deal comes in the form of a joint venture 50.1pc owned by Lloyds, according to Sky News, which first reported the deal.
It is the first part of a three-pronged alliance between the two financial blue chips that would also include Schroders taking on a £109bn investment management contract from Lloyds’s insurance and pensions company Scottish Widows, which is currently held by Standard Life Aberdeen.
Schroders is also considering selling a 19.9pc stake in Cazenove Capital, its high-net-worth wealth manager, to Lloyds.The combined deal was reported to be worth about £500m, with Lloyds’ wealth unit and the Cazenove stake both valued at roughly £250m each.
Schroders said the companies were in talks “with a view to working closely together in parts of the wealth sector”.They added: “Discussions are ongoing and there can be no certainty that [they] will lead to any formal arrangement being entered into."
A further announcement will be made when appropriate.Expanding Lloyds’s wealth management credentials has been a key aim for António Horta Osório, who took charge of the banking group in 2011.
The combined deal was reported to be worth about £500m, with Lloyds’ wealth unit and the Cazenove stake both valued at roughly £250m each.
