Lloyds and Schroders confirm wealth tie-up

Lloyds Banking Group and investment giant Schroders have joined forces to create a new wealth management venture.

The deal will see Lloyds merge its £13 billion wealth management arm into the new entity, which would be 50.1% owned by the lender.

As part of the tie-up, Schroders will take on £80 billion of an investment management contract from Scottish Widows, which is owned by Lloyds.

For Lloyds, it would enjoy access to the Schroders technology and investment platform, while for Schroders it would have access to the bank’s vast customer base.

Antonio Horta-Osorio, Lloyds chief executive, said: “I am delighted to be announcing this exciting partnership with Schroders and the creation of a new market leading wealth management proposition.

“This provides a strong platform for growth and is a further step in the delivery of our strategic objectives.”

The companies said partnership will allow Schroders to expand into the strategically important UK wealth management market and help Lloyds to accelerate the development of its financial planning and retirement business.

Lloyds will also take up to a 19.9% stake in Schroders’ UK wealth management business and transfer £400 million to the unit.

“Wealth management is a strategic priority for Schroders. In combining our award-winning technology and world-class investment expertise with Lloyds’ significant client base and digital capabilities, we are creating a strategic partnership which is exclusively focused on the evolving needs of UK savers and investors,” said Schroders boss Peter Harrison.

Schroders shares were trading 3% lower on Tuesday at 2,683p, while Lloyds shares were down 0.4% at 56.2p.