Standard Life, Lloyds settle £104 billion fund dispute

London

LLOYDS Banking Group Plc and Standard Life Aberdeen Plc have settled a dispute over the bank's decision to pull its £104 billion (S$177 billion) contract from the asset manager.

Lloyds will pay Standard Life £140 million in cash as compensation and leave about £35 billion of the total under their management until at least April 2022, according to a statement from Standard Life on Wednesday.

The assets remaining under management comprise about £30 billion of passively managed portfolios and about £5 billion in real estate funds.

Standard Life fought hard to keep the contract and challenged the legality of Lloyds's decision to pull the money. An arbitration panel ruled in March in the asset manager's favour, but Lloyds maintained at the time that it still planned to move the funds.

"We are pleased with the settlement with Lloyds Bank Group and believe that it represents a fair and positive outcome for both parties," Standard Life chief executive officer Keith Skeoch said in the statement.

"The retention of assets in our passive strategies as well as active real estate portfolios positions us to benefit from scale and growth in these growing parts of the asset management industry."

The arrangement between the two companies was a legacy of Aberdeen's acquisition of Scottish Widows Investment Partnership from Lloyds in 2014. The lender, which said the Standard Life merger created a competitor to its own insurance unit that breached the contract, announced last year that it was ending the arrangement and looking for alternative managers. Lloyds appointed Schroders Plc and BlackRock Inc. as the new managers. BLOOMBERG