Standard Life Aberdeen wins tribunal ruling over £100bn Lloyds contract

Standard Life Aberdeen has said a tribunal has ruled that Lloyds Banking Group did not have the right to end a mammoth £100 billion contract with the asset manager.

It said the tribunal found in its favour that Lloyds was not entitled to give notice to terminate the investment management agreements between the two firms.

Keith Skeoch, chief executive of Standard Life Aberdeen (SLA), said: “Now that the arbitration panel has ruled in our favour, we will carefully consider our next steps, working constructively with LBG (Lloyds) to bring the matter to resolution.”

SLA added that, in the meantime, it will continue to manage the assets “in the best interests” of Lloyds customers.

Shares in SLA rose 3% after the announcement.

Last May, SLA launched its challenge against the lender’s decision to end the lucrative contract.

Lloyds had claimed it was entitled to end the agreement due to competition issues with its Scottish Widows business, which were created by the merger of Aberdeen and Standard Life in 2017.

Lloyds dealt the blow to the asset management giant in February 2018, when it announced it was ending the contract – SLA’s largest single client – citing a material competitor clause.

The investment management deal was set to end after a 12-month notice period, as required under the original agreement between Aberdeen Asset Management and Lloyds.

A spokesman for Lloyds Bank-owned Scottish Widows said: “We are disappointed with the decision of the arbitration tribunal, and will look to discuss its outcome with Standard Life Aberdeen.”

He added: “We will discuss starting the process of an orderly transfer of assets to our new partners, BlackRock and Schroders.

“We will continue to work closely with Standard Life Aberdeen to ensure there is no disruption to performance or service.”

Aberdeen took on the deal to manage the £109 billion of assets when it bought Scottish Life Investment Partnership from Lloyds in 2014.

But Lloyds maintains there was a clause allowing it to end the mandate if Aberdeen merged with a competitor and believes this was triggered by the £11 billion tie-up between Standard Life and Aberdeen Asset Management, creating the UK’s biggest fund manager.