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Standard Life Aberdeen contests Lloyds' £109bn fund withdrawal
Standard Life Aberdeen said Lloyds Banking Group did not have the right to withdraw £109bn of funds, setting up a legal dispute between the two companies.
The fund manager said Lloyds was wrong to state that Standard Life's acquisition of Aberdeen Asset Management in August 2017 made the combined company a competitor.
In February Lloyds told Standard Life Aberdeen it was terminating an agreement to manage the funds. The investment management agreement (IMA) was struck when Aberdeen bought Scottish Widows Investment Partnership from Lloyds in 2014.
Lloyds argued it was able to cancel the agreement with 12 months' notice because after being bought by Standard Life Aberdeen had become a competitor. Under the 2014 deal Lloyds was allowed to end the arrangement if this happened.
In an update on the talks Standard Life Aberdeen said it disagreed with Lloyds that it was in material competition with the bank.
"SLA does not consider that LBG, Scottish Widows or their respective affiliates has the right to terminate the IMAs," Standard Life Aberdeen said. "The parties are engaging with each other within the framework of the dispute resolution process envisaged in the IMAs."
Standard Life Aberdeen said in February it would take a £40m impairment charge for the Lloyds relationship. In its update, the company said annual revenue from the assets was £129m, about 4.4% of 2017 revenue for the combined group.